A majority of senior finance executives in the U.S. plan to invest in their companies to drive growth - including travel - and expect to achieve higher revenues and profits next year, a new American Express survey of 200 U.S. CFOs and senior finance executives reports. The study finds a notable disparity between companies’ brighter view of their own prospects and concerns about sluggish economic growth in the U.S. and in key regions around the world, including the UK and Europe, Amex said.
The potential impact of the so-called “fiscal cliff” looms large, Amex notes, with 52 percent of senior finance executives predicting that negotiations will not be resolved by the end of 2012. If the combination of expiring tax cuts and across-the-board government spending cuts takes effect in 2013, 79 percent of senior finance executives expect an impact on their companies’ growth plans, Amex said.
“CFOs are continuing to shift from a defensive posture toward making smart, savvy investments so they can compete and grow,” said Darryl Brown, president, Global Corporate Payments – Americas, American Express. “It’s encouraging to see that companies expect revenues and profits to expand and plan to spend in areas like new product development, laying the foundation for stronger growth in the future.”
2013: A Growth Opportunity for Businesses: Senior finance executives report positive sentiments for their own companies, even though they harbor continued concern for the U.S. economy in 2013. Three in five senior finance executives (59%) are prioritizing investments in growth – in contrast with just 37 percent that are focused on saving money in order to protect the bottom line.
Senior finance executives also report a healthy revenue and profit outlook. Three in four respondents (75%) anticipate revenue growth for their own companies in 2013, and 69 percent expect increased profits. They are also confident they will reach their goals: 84 percent of senior finance executives are certain their companies will achieve what they set out to accomplish in 2013.
This generally optimistic view also holds when projecting further into the future – 89 percent of senior finance executives expect to see higher revenues three years from now.
Choosing Key Targets for Investment: Domestic and international expansion are both on the agenda for a majority of senior finance executives in 2013 (61% plan to grow domestically and 53% internationally.) To drive growth next year, respondents report their companies plan to spend more in three key areas:
· New technology – 61 percent
· New product and service development – 59 percent
· Expansion into new markets – 52 percent
About one in three senior finance executives (36%) expect their companies to increase headcount in 2013, primarily motivated by a focus on business growth. Companies that are hiring will emphasize areas such as customer service, IT, sales, and research and development.
Steady Business Travel Spending: Corporate investment in business travel should remain stable in 2013 – 61 percent of senior finance executives anticipate spending the same or more on business travel next year.
The most important reasons for making travel investments, according to the study? Building new business (37%) and retaining current business (35%). However, most senior finance executives (64%) do not anticipate that corporate travel policies will loosen next year, in line with companies’ disciplined approach to controlling overall spending, Amex says.
“Road warriors can expect to keep visiting new prospects and current customers in 2013 because these are the kinds of trips that drive sales,” said Brown. “Businesses will be looking to manage their travel programs with a focus on holding down costs through negotiated discount rates and a strategic emphasis on high value trips.”
U.S. Economic Outlook is Measured: Two in three senior finance executives (67%) expect the U.S. economy to grow or remain flat in 2013. Among those anticipating growth, 50 percent expect it to be within the 1 to 4 percent range.
Consumer spending will help shore up the economy: Three in four senior finance executives (73%) expect consumer spending to remain stable or increase, the study reports.
Mixed Global Prospects: Looking abroad, senior finance executives are expressing guarded optimism about the future of a number of key global economies. Nearly half of respondents expect Brazil to perform better in 2013, and a substantial percentage also feel the economies of China and India will improve next year. However, concerns continue to swirl around the UK and Europe, Amex notes.
Echo Research conducted the online survey of 200 senior finance executives at large global companies across a wide range of industries in the U.S. from November 12th to 21st, 2012.
Through its Global Corporate Payments group, American Express provides the Corporate Card, Corporate Purchasing Solutions, and other expense management services to mid-sized companies and large corporations worldwide.
Visit www.americanexpress.com/corporate