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CFOs' global optimism plummets

Roy Harris | Oct. 19, 2011
Reversing a trend of positive reviews on the global economy, the latest Bank of America survey of 275 U.S. corporate finance chiefs found that they had backed off from the optimism they expressed in a spring review in which they were high on world economic matters, and the manufacturing, services, and commodities sectors.

Currently, 46% of CFOs predict profit margin growth, the same as previously in the spring report, although those predicting lower profit margins have risen to 26% from 14%.

The survey showed that half of all U.S. companies had no short-term plans to change work-force size. The 37% that did anticipate hiring additional permanent employees was down from 45%.

Slightly more than a third of the companies involved in the survey currently have no international business. But 64% of all mid-sized U.S. companies said they did business internationally -- buying from foreign markets (50%), selling to foreign markets (48%), and/or having foreign operations (28%).

That their international business will represent a greater percentage of total revenues within the next three years was the position of 58% (61% in manufacturing and 52% in both services and commodities.)

The top overseas challenges that emerged from the survey: logistics (43%), local laws and regulations (41%), culture (34%), currency risk (33%), and vendor performance (33%).


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