The nation’s chief financial officers are expecting technology spending and hiring to each increase 7 percent over the next 12 months, according to a quarterly survey of sentiment by Baruch College in New York.
"The quarter was characterized by a moderating of hopes and expectations," said John Elliott, Dean of the Zicklin School of Business at Baruch College. "With the exception of technology spending, almost all of the expected increases for the next 12 months are smaller than they were last quarter.’’
Only 11% of the financial executives (including CFOs from insurance companies, among other financial services companies) expect an increase in revenues and 20% an increase in profits. The overriding expectation: New expenses, from taxes, financial regulatory reform and healthcare.
That led Baruch’s Optimism Index for the U.S. economy to drop nearly five points to 53.60, from 58.14. The CFOs' outlook for their own companies fell slightly from 69.49 to 67.40.
When asked about the potential impact the financial regulatory reform package would have, the most-cited effect was increased banking costs (45%), followed by additional compliance and reporting requirements and costs (39%).
Separately, the majority of CFOs (53%) also predict their taxes will increase.
This article has been reprinted with permission from Information Management.
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