WASHINGTON – A survey of 500 chief financial officers at U.S. companies released Tuesday found them optimistic about the American economy, with more than half of them expecting to hire additional employees next year, the highest level in eight years.
The annual survey sponsored by Bank of America Merrill Lynch showed that the chief financial officers see rising health care costs and weak domestic demand as the biggest threats to company earnings. A strong dollar and weak global demand were viewed as lesser threats.
The survey found that the chief financial executives at companies with annual revenues ranging from $25 million to $2 billion were generally upbeat about economic prospects next year, with 54 per cent saying they expected to hire additional full-time workers, while only 5 per cent expected to lay off workers.
The percentage of companies predicting increased hiring was up from 52 per cent in last year’s survey. During the depths of the last recession, the number fell as low as 23 per cent who had expected to increase hiring in 2009.
Bank of America Merrill Lynch has conducted the annual survey of executive opinions for the past 18 years.
Executives in this year’s survey gave the U.S. economy an average score of 61, up from last year’s 59, which, like the job hiring percentage, was the highest in eight years. On the survey scale, zero is an extremely weak economy and 100 is extremely strong.
“Chief financial officers continue to be optimistic about the U.S. economy and their own companies,” said Alastair Borthwick, head of global commercial banking at Bank of America Merrill Lynch. “This is consistent with what we are hearing from our middle-market clients.”
The survey found that 39 per cent listed health care costs as the top threat to their company’s earnings next year followed by 39 per cent who cited weak domestic demand and 31 per cent who listed increased competition. The strong dollar, which has hurt export sales, was listed by 17 per cent of those surveyed, while 10 per cent listed weak international demand as one of the top threats to their company earnings.