Senior finance managers are more optimistic about the economy than they’ve been in five years, according to the “2013 CFO Outlook: Mid-Year Update” from Bank of America Merrill Lynch. Granite Research Consulting surveyed 250 CFOs, finance directors, and other executives from businesses of all sizes located throughout the United States. Fifty-eight percent of them are feeling positive about the domestic economy. That’s a jump of almost 10 percentage points from the 49 percent who felt positive at the beginning of 2013, and it’s the survey’s highest proportion of optimistic CFOs since 2008.
A clear majority of respondents (55 percent) expect the economy to expand later this year, and only 10 percent expect it to contract. That’s a big change from six months ago, when 39 percent predicted an expansion and 24 percent expected a contraction.
More than three-quarters of companies represented in the survey do business internationally. Sixty-six percent buy from foreign markets (up from 61 percent a year ago). Fifty-nine percent sell to foreign markets (up from 42 percent a year ago). And 32 percent have operations in foreign countries, up from 21 percent a year ago. Among the organizations that have operations in other countries, 84 percent do business in Canada and/or Mexico; 72 percent do business in the Asia/Pacific (APAC) region; 66 percent have facilities in Europe, the Middle East, and/or Africa (EMEA); and 25 percent have operations in Latin America.
Many of these businesses expect to expand abroad: 37 percent in the APAC region, 27 percent in Canada or Mexico, 15 percent in the EMEA region, and 9 percent in Latin America. As they do so, they will be keeping an eye on several notable challenges, including managing risk, navigating new cultures, managing liquidity, and accessing capital. (See Figure 3.)