Although CFOs plan to increase their spending in the next year, it won’t be as much as it has been in previous years.
According to a Duke University/CFO Magazine poll, U.S. CFO optimism has declined from the previous quarter. European financial executives were also more pessimistic. Even if interest rates fall further, more than eight in 10 CFOs said they would not initiate or expand investment plans.
The pessimism stems from uncertain consumer demand, concerns over health care reform, uncertainty over federal government policies, pricing pressures and scarcity of skilled employees.
Though CFOs plan to increase their spending over the next 12 months, they said the amount of increase would be lower than it has been in previous years.
The article points to many reasons the companies are holding cash. They don’t want to spend as much as last year or six months ago. The uncertainty in global markets is causing CFOs to pause on aggressive spending. The CFO.com article points out the obvious reasons businesses are being cautious, and there won’t be change in those until at least the election in November. Why? Because changes in healthcare legislation, corporate tax structure and other issues such as inflations and job creation will depend on the person who is elected president.
Source: CFO.com, September 2012