Much news is being made in the press this month about the impending fiscal cliff that the US will sail off of if compromise cannot be made in Washington. Things are looking increasingly difficult as initial offerings have been rejected by the GOP.
On top of these fears is the ongoing European debt crisis that appears to show no signs of being solved any time soon. Greece is experiencing frequent riots, increasingly extremist political parties, and other serious problems. Unemployment in Spain is skyrocketing, especially for the young. It doesn’t look very good right now.
According to a release published on December 3rd by the Financial Executives International Organization and Baruch College’s Zicklin School of Business, “Chief Financial Officers, especially in the U.S., continue to remain uncertain about the future of the economy and their business.” They are also still worried about the strength of the US recovery, despite its slow growth.
Fifty-three percent of CFOs surveyed believe that recovery won’t come until 2014 or later. Percentages were in the 20s for those who think it will happen in 2012. CFOs have a lot to consider as they plan the future finances of their respective corporations. In addition to the unknown of the financial cliff, the full implementation of the Patient Protection and Affordable Care Act will be complete in 2014.
The new healthcare rules will have an impact on hiring and employment costs for CFOs in all industries. They have yet to determine how much of an economic impact this will have on corporate finances. Surprisingly, however, many CFOs in the US have been keeping their payrolls steady. They are currently focused on retaining their talented workforce. But the results show that “58 percent of US CFOs … plan to hire additional staff in the next six months.”
Still Stuck with Uncertainty
Unfortunately, the global economic climate is still somewhat paralyzed by uncertainty. The questions that remain to be answered are serious ones. How Europe and the fiscal cliff develop will play a significant role in how CFOs implement their strategies for their respective companies.
Even though close to half of CFOs in the US and Europe have remained optimistic about the global economy, there are still plenty of problems weighing on them. Until the US and EU economic situation improves, CFOs will continue to have a challenging time planning for the future and finding the right investments, financing, and funding they need in order to help their corporations continue to grow.