UK CFOs Gloomy on 2012 Economic Outlook
UK finance chiefs are decidedly downbeat with only one in four expecting a return to any economic expansion in the year ahead, according a worldwide survey of CFOs.
But their counterparts in India (85%), the US (78%) and Germany (73%) were far more bullish – forecasting a modest upswing, according to the fifth annual American Express/CFO Research Global Business & Spending Monitor survey.
Faced with an upturn in the global economy, CFOs globally are planning to cement growth prospects by making investments in mergers and acquisitions, expanding both operating capacity and R&D.
Hiring is also on the rise, with a majority of CFOs worldwide planning to increase headcount over the next 12 months. But in the UK, senior finance directors are adopting a far more sober and conservative approach, with plans to conserve cash, implement tighter cost control measures and inflict cuts in a bid to safeguard company profitability.
On a more positive level, almost six out of 10 UK CFOs (58%) expecting a return to substantial economic growth next year. Against the backdrop of 2012 it is unsurprising that over half (55%) of company CFOs admitted to setting less aggressive targets than in 2011. While clearly less pugnacious, British finance chiefs have strived to inject a dose of healthy realism to their target setting. Some 76% believe they will hit them.
Just 24% of UK companies expect to increase employee numbers with 68% saying that any new hires will be recruited to improve expertise and acquire specialist skills.
And two thirds (58%) of the surveyed UK senior finance executives plan to cut employee numbers ‘moderately’, while 8% expect to see a ‘substantial’ cut, compared to the global average of 5%.
The survey of 541 CFOs in the US, Europe, Canada, Latin America, Asia and Australia took place in March.