Optimism abounds among U.S. chief financial officers who expect to ramp up their hiring efforts in anticipation of continued strong demand for their companies' goods and services, according to a new survey by Grant Thornton LLP.
With the wind of a strong stock market and improving unemployment figures at their backs, 48% of CFOs are now expecting the overall U.S. economy to improve in the next six months and 54% predict sales and earnings for their individual companies will also increase over this same period.
However, these robust projections are tempered by a very real fear of inflation as the economy expands and companies incur additional costs related to adding staff, acquiring materials and augmenting their sales and marketing budgets.
Exactly 50% of CFOs said their companies plan to raise prices in the near future, up from 31% six months ago and 24% last year. This pricing pressure is expected to be especially pronounced in the manufacturing sector where two-thirds of CFO plan to raise prices -- double the percentage planning to do the same six months ago.
The findings mirror a similar Grant Thornton LLP poll in February which revealed that 72% of banking executives were confident the U.S. economy would continue to grow at a healthy clip and that 64% of all business executives felt the same way.
Thirty-nine percent of 318 CFOs and comptrollers surveyed this time around said they plan to add workers in the next six months, up from 28% in October.
When it comes to the natural disaster and ensuing human tragedy unfolding in Japan, CFOs are certain the ramifications will be felt for years to come.
Eighty-three percent said they expect the Japanese crisis will "somewhat" impact the U.S. economy in the short term while 11% are predicting it will "greatly impact" American firms.
Only 5% of CFOs said the Japanese economy will bounce back from the debacle in less than a year while 50% believe it will take three years or more for the world's third-largest economy to right its ship.
