• by Jack Loechner , Staff Writer @mp_research, January 2, 2012

According to the “2012 CFO Outlook,” a survey released in December 2011 by Bank of America and Merrill Lynch, chief financial officers give the US economy an average score of 44 on a scale of 0 to 100, down from 47 at the beginning of 2011. This score is equal to the 2010 score, which was the lowest in the survey’s 14-year history.

The anticipated global economy rates lower than the US, at 43, down from 51 at the beginning of 2011. And, only 38% of CFOs expect the US economy to expand in the coming year, down from 56% in last year’s survey.

More than half of the 600 executives surveyed expect their corporate revenues to grow in 2012. 46% expect their companies to hire employees, 48% expect to maintain the same employment levels and only 7 percent anticipate reductions. More than three-fourths of CFOs said their R&D expenses were the same or higher than pre-recession levels. Finally, more CFOs this year say that more credit is available, and fewer CFOs say they expect the cost of capital to increase in 2012. 

Although CFOs hold a fairly pessimistic view of the economy, 56% expect their corporate revenues to grow in 2012, although that proportion is down from 64% a year ago. Similarly, while 41% are forecasting profit growth, that proportion is also down from 55% one year ago, and a significant 15% of respondents predict declines in the year ahead.

Senior financial executives are more concerned about more factors that could affect the economy than in any previous point in the CFO Outlook survey’s history. Heading into a critical election year, 70% of CFOs cited concern about the effectiveness of U.S. government leaders and 63% cited the U.S. budget deficit. In addition, they listed healthcare costs, unemployment levels and consumer confidence as concerns. By contrast, last year’s top concern regarding the economy was healthcare reform, chosen by 54% of CFOs. 

The 2012 survey captures views across five key categories: Economies and Sectors; Performance and People; Financing; Mergers and Acquisitions; and International Trade. More details and findings, the full report, and a Webcast will be available online beginning February 1, 2012.