CFO's See Small Light at End of Ecomomic Tunnel
As big companies worry about the next round of bonuses, small and mid-sized businesses have taken the brunt of the economic onslaught.
However, a new poll out this week, conducted by Prime Advantage, found widespread optimism with CFO's about the economy in 2010, which coincides with the latest U.S. Federal Reserve data showing growth in industrial output for the seventh consecutive month, even as the PPI showed energy costs rising in January.
This is the second consecutive year that Prime Advantage has undertaken a survey of its member companies’ CFOs.
Responses to several questions in the 2010 survey indicate that optimism has returned to small and midsized manufacturing enterprises in 2010, including the finding that 67 percent reported feeling more optimistic about the economy compared to 2009, and that 64 percent were more optimistic about the financial prospects for their own companies.
In addition, in ranking their own companies’ financial prospects for 2010 on a scale of 1-10, with 10 being most optimistic, 51 percent ranked themselves at 7 or greater.
The results are more optimistic than the 2009 CFO Survey, in which 55 percent of CFOs said they were pessimistic about the economy, and 45 percent said they were pessimistic about the financial prospects for their own companies.
Also, the 2010 survey shows that 64 percent of respondents believe the manufacturing economy will expand in 2010.
While industrial output has been on a steady climb, there are still signs that the recession and tight credit conditions will continue to impact growth in 2010, as 91 percent of respondents said their customers and prospects have been affected by the cost or availability of credit.
In another sign of a sluggish recovery, 57 percent reported that domestic employment in their factories will not return to year end 2007 levels before 2011 or 2012. However, when asked whether they would hire new staff to meet an increased demand in 2010, 82 percent responded affirmatively.