Dec. 17, 2012
A majority of the 200 U.S.-based chief financial officers and senior finance executives surveyed said they plan to invest in their companies to drive growth in 2013, and expect to achieve higher revenues and profits in the New Year. The new survey was sponsored by American Express.
The results also showed a disparity between companies' optimism about their own prospects and concerns about slow economic growth in the U.S., as well as key global markets such as Europe.
Also, the potential impact of the so-called "fiscal cliff" is a concern, with 52 percent of senior finance executives predicting that negotiations will not be resolved by the end of 2012. If the combination of expiring tax cuts and across-the-board government spending cuts takes effect in 2013, 79 percent of survey respondents expect an impact on their companies' growth plans.
"CFOs are continuing to shift from a defensive posture toward making smart, savvy investments so they can compete and grow," said Darryl Brown, president, Global Corporate Payments — Americas, American Express. "It's encouraging to see that companies expect revenues and profits to expand and plan to spend in areas like new product development, laying the foundation for stronger growth in the future."
2013: A growth opportunity
Survey respondents reported positive sentiments for their own companies, even though they harbor continued concern for the U.S. economy in 2013. Three in five senior finance executives (59 percent) are prioritizing investments in growth – in contrast with just 37 percent that are focused on saving money in order to protect the bottom line.
Senior finance executives also report a healthy revenue and profit outlook. Three in four respondents (75 percent) anticipate revenue growth for their own companies in 2013, and 69 percent expect increased profits. They are also confident they will reach their goals: 84 percent of respondents are certain their companies will achieve what they set out to accomplish in 2013.
This generally optimistic view also holds when projecting further into the future – 89 percent of executives expect to see higher revenues three years from now.
Key targets for investment
Domestic and international expansion are both on the agenda for a majority of senior finance executives in 2013 (61 percent plan to grow domestically and 53 percent internationally.) To drive growth next year, respondents report their companies' plan to spend more in three key areas:
- New technology – 61 percent;
- New product and service development – 59 percent; and
- Expansion into new markets – 52 percent.
About one in three (36 percent) expect their companies to increase headcount in 2013, primarily motivated by a focus on business growth. Companies that are hiring will emphasize areas such as customer service, IT, sales and research and development.
U.S. economic and global outlooks
Two in three respondents (67 percent) expect the U.S. economy to grow or remain flat in 2013. Among those anticipating growth, 50 percent expect it to be within the 1 to 4 percent range.
Consumer spending will help shore up the economy. Three in four (73 percent) expect consumer spending to remain stable or increase.
Looking abroad, senior finance executives are expressing guarded optimism about the future of a number of key global economies. Nearly half of respondents expect Brazil to perform better in 2013, and a substantial percentage also feel the economies of China and India will improve next year. However, concerns continue to swirl around the UK and Europe.
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