On March 9, 2016 the March Duke/CFO Global Business Outlook was released. It contains a variety of statistics regarding how CFOs view business and economic conditions.
In this CFO survey, I found the following to be the most notable excerpts:
U.S. CFOs, on average, believe there is a 31 percent chance that the U.S. economy will be in recession by year-end 2016, double the 16 percent chance predicted just nine months ago. The executives say the biggest risk factors to cause recession are the slowdown in China (59 percent of CFOs assign China as a significant risk), political turmoil in the U.S. (53 percent), a stock market decline (50 percent) and the price of oil (40 percent).
Among firms whose wage structures would be affected, about 20 percent say they would lay off current workers if the minimum wage is increased to $10 and 44 percent would slow future hiring. At a $15 wage, 41 percent would lay off current employees while 66 percent would slow future hiring. An increase to $8.75 would affect fewer firms, but among those, 11 percent say they would lay off current employees, and 36 percent say it would slow future hiring.
Capital spending is expected to increase just 2 percent over the next year, down from 2.5 percent last quarter and the 5 percent growth predicted in June.
The CFO survey contains two Optimism Index charts, with the bottom chart showing U.S. Optimism (with regard to the economy) at 59, as seen below:
It should be interesting to see how well the CFOs predict business and economic conditions going forward. I discussed past various aspects of this, and the importance of these predictions, in the July 9, 2010 post titled “The Business Environment”.
(past posts on CEO and CFO surveys can be found under the “CFO and CEO Confidence” tag)
I post various economic forecasts because I believe they should be carefully monitored. However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1989.26 as this post is written