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CFOs Show Growing Confidence in U.S. Economy

During the past year, chief financial officers (CFOs) have grown significantly more confident in the U.S. economy, according to the 2013 Spring CFO Survey from Grant Thornton LLP. The survey findings reveal that 45 percent of respondents believe the state of the U.S. economy will improve during the next six months, compared to just 31 percent in the fall and 25 percent last summer.

That confidence extends throughout the survey findings, with 44 percent of those surveyed predicting that industry financial prospects will improve during the next six months, compared to 34 percent in the fall. Since last summer, the number of CFOs who believe the pricing or fees charged by their industry will increase in the next six months has jumped seven percentage points to 37 percent. In addition, when CFOs were asked about employment opportunities during the next six months, more than a third (40 percent) said their company’s head count would increase, rising 6 percent from the fall.

“The results of our spring survey are encouraging — particularly with respect to the uptick in expectations for improved financial prospects,” said Stephen Chipman, chief executive officer of Grant Thornton LLP. “Seemingly, steady improvements in key economic indicators, including labor and housing, have helped stimulate greater optimism among CFOs, at least in the near-term.”

According to the survey findings, almost two-thirds of CFOs (65 percent) expect the average cost of an employee’s salary to increase during the next 12 months, up from 59 percent in the fall. The total cost of employee benefits, including bonuses (56 percent), stock options (72 percent), 401(k) match (86 percent), and other company-matched retirement contributions (81 percent), are expected to remain unchanged from the year prior.

These findings come on the heels of similar data from the Grant Thornton International Business Report, which found that optimism in the performance of the nation’s economy among U.S. business leaders rose from -4 percent in fourth quarter 2012 to 31 percent in first quarter 2013.

While increased optimism among CFOs was prevalent throughout the survey results, they still cite legislative bottlenecks as an area of concern. Almost half of all CFOs surveyed (47 percent) say they are unable to make a major decision that would allow their company to grow because of uncertainty surrounding the funding of the U.S. government. Thirty-one percent of respondents ranked tax reform as the second greatest bottleneck.

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CFOs see stability in US economy despite ‘fiscal cliff’ threat

Nearly 70 percent of chief financial officers of US companies believe the US economy will either improve or remain stable during the next six months, according to the 2012 Fall CFO Survey from Grant Thornton LLP. The survey findings reveal that 39 percent of respondents believe the state of the US economy will remain the same in the first half of 2013, while 30 percent believe it will improve. Of those surveyed, 31 percent said it will worsen, which is an increase of ten percentage points from the firm’s 2012 Summer CFO Survey findings.

That expectation of stability extends throughout the survey findings, with CFOs predicting that industry financial prospects (42 percent), pricing or fees charged (51 percent), and head count (49 percent) will all remain the same in the next six months.

And though the threat of a “fiscal cliff” looms large, 53 percent of respondents say it would not affect the first six months of 2013 for their companies. Further, 60 percent of respondents do not consider the uncertainty of the “fiscal cliff” resolution an obstacle to making business decisions.

“The turbulent years of the recent past have made businesses more adept at managing through economic uncertainty,” said Stephen Chipman, chief executive officer of Grant Thornton LLP. “It is reassuring to see that CFOs are confident that we will not take any steps backward in our progress.”

Also encouraging, 34 percent of respondents believe industry financial prospects will improve, 35 percent believe pricing or fees charged will increase, and 34 percent say head count will increase.

In addition, according to the survey findings CFOs are committed to keeping several employee benefits the same as last year, including bonuses (55 percent), stock options (69 percent), 401K match (85 percent), and other company-matched retirement contributions (82 percent). On a positive note, 59 percent plan to increase salaries.

“While many companies don’t foresee the economy taking a turn for the worse in the next six months, there is still an absence of improving economic conditions that are needed to propel our country into growth mode,” Chipman added. “Only 34 percent of companies expect their financial prospects to improve in the next six months, which means that reluctance to increase hiring and make capital investments will continue to bog down our economy.”

Grant Thornton LLP conducts its CFO Survey twice a year with CFOs and other senior financial executives across the United States. The fall 2012 survey took place between November 7 and November 30, with 1,582 CFOs and comptrollers participating. The survey has a confidence interval of +/- 2.5% at a 95% confidence level. Questions ranged from the state of the economy to developments in accounting and financial reporting. For more information on the survey, visit www.GrantThornton.com/CFOSurvey.

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Grant Thornton Give Back Day

On Thursday, Nov. 15, nearly 800 current and retired partners and managing directors from Grant Thornton LLP offices across the globe gathered in the Valley during their annual meeting, which was held at the Fairmont Scottsdale Princess, to help give back to the local area community. During the day, the firm made a check presentation of $12,000 to Kitchen on the Street, a non-profit organization that provides food for children who are not guaranteed a meal during weekends. In addition, the partners supplied and assembled emergency food kits for 500 local families in need this holiday season, also through Kitchen on the Street.

“Hunger is a growing crisis for 17 million children in the United States,” said Ralph Nefdt, Grant Thornton’s local office managing partner. “One in four American children struggles with food insecurity, which results in academic developmental issues that present both immediate and long-term challenges. These issues not only affect the child experiencing food insecurity, but the entire community.”

A leader in this community, events like this are just some of the many outreach programs supported through Grant Thornton C.A.R.E.S. (Community Awareness and Responsibility Expressed through Service), a program designed to demonstrate leadership not only in its industry, but also in its community. Through the program, nicknamed GT CARES, employees contribute time, money and expertise to local civic organizations, charities, universities and professional associations.