With concerns mounting over the upcoming Presidential election and the Eurozone crisis, CFOs are tempering their optimism about economic growth and relying more on temporary employees in their hiring plans.

The quarterly CFO Outlook Survey from Baruch College of New York and Financial Executives International polled more than 300 CFOs in the U.S., Italy and France on their expectations. In the fourth quarter, CFOs in the U.S. showed little change in overall optimism since the third quarter. Their confidence for the global economy rose slightly to 46.1 (from 45.50 in Q3), as did their confidence in their own businesses (67.60 from 67.30 in Q3). U.S. CFOs reported increased optimism in the U.S. economy this quarter, moving six points to 57.1 (from 51.10 in Q3).

CFOs in Europe are more uncertain on plans to expand their workforce than U.S. CFOs. CFOs in both the U.S. and Europe are relying on temporary, interim or contract professionals within their organizations. Seventy-five percent of CFOs are currently using this type of employees.

With unemployment expected to remain high, CFOs in Europe are uncertain if they plan to expand their workforce. Forty-two percent plan to hire addition employees within the next six months, but a similar number of 43 percent indicated they will not be hiring.

In comparison, the majority of their counterparts in the U.S. are planning to hire in the next six months (57 percent), and about a third (32 percent) are not planning to hire. 

CFOs are worried about the fate of the Eurozone, and expressed varying degrees of concern about inflation and interest rates. When asked to rate their concern on a scale of one (not concerned) to five (very concerned), nearly all of the U.S. CFOs (93 percent) surveyed selected a “three or higher,” which surpassed the percentage of CFOs in Europe who expressed this sentiment (77 percent).

U.S. CFOs are seeing inflation as a minor concern.  When asked to rank their concern on a scale of one to five (with five being very concerned), most U.S. CFOs (88 percent) selected a “three or lower.” In Europe, concerns are greater with 43 percent selecting a four or five. The large majority of CFOs (78 percent in the U.S. and 72 percent in Europe) stated that their concern remained the same since the previous quarter. The expected rates of inflation in the two areas are expected to converge with U.S. CFOs expecting a rate of 2.9 percent one year out and European CFOs expecting 3.2 percent.

CFOs anticipate interest rates in the U.S. will remain around 2.4 percent six months from now, rising to 2.7 percent a year from now. As with inflation, the large majority of CFOs have a moderate to low concern over interest rates. On a scale of one to five, 88 percent selected a “three or lower.” Meanwhile, European CFOs expect interest rates to be around 4 percent within the next six to 12 months. When asked to rank their concern on a scale of one to five, they are more concerned about the interest rates, with nearly three quarters (74 percent) expressing a concern of “three or higher.”

While CFOs are making capital investments, 58 percent of the CFOs surveyed in Europe and 43 percent in the U.S. are spending cautiously at the current time. However, 33 percent of CFOs in the U.S. and 25 percent of CFOs in Europe stated that they are spending at a normal rate and less than 10 percent are holding on all investments. Most CFOs are directing their capital expenditures toward technology (44 percent in the U.S. and 41 percent in Europe), followed by expansion into new and emerging markets and machinery.

U.S. CFOs said that Mitt Romney is their preferred Presidential candidate, but are split on whether he will win.