Sixty percent of CFOs believe the state of the U.S. economy will remain stagnant or worsen during the next six months, according to a new survey by Grant Thornton.
The Grant Thornton LLP 2013 Fall CFO Survey of more than 1,600 CFOs and other senior financial executives across the U.S. found that 24 percent of the CFOs who responded cited funding the government and/or replacing across-the-board spending cuts known as “sequestration” as their most important legislative priority, while 24 percent highlighted the need to reform the Tax Code.
The results come after what had been a slow increase in confidence in the U.S. economy over the course of the past year, with 45 percent of the survey respondents indicating this past spring that the state of the economy would improve, compared to just 31 percent in the fall of 2012 and 25 percent in the summer of 2012.
“The declining confidence and uncertainty in the performance of our economy shouldn’t be surprising given the recent gridlock surrounding our nation’s budget and debt ceiling negotiations,” said Grant Thornton CEO Stephen Chipman in a statement. “It’s time for our country’s political leaders to embrace a long-term budget solution combined with comprehensive tax and entitlement reforms in order to remove the largest obstacles to business uncertainty and position the United States for a sustained economic recovery.”
Uncertainty extends throughout the survey findings, with 56 percent of those surveyed predicting that industry financial prospects will remain the same or worsen, revealing no change since the spring. The number of CFOs who believe the pricing or fees charged by their industry will remain the same or decrease also remained the same from the spring at 63 percent.
However, when CFOs were asked about employment opportunities in the next six months, 43 percent of the survey respondents said their company’s headcount would increase or significantly increase, a moderate three-percentage point increase from the spring. In addition, more than two-thirds of CFOs (68 percent) expect the average cost of an employee’s salary to increase during the next 12 months, up from 65 percent in the spring.
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