2013 CFO Outlook: Investing in Growth, Looking to Expand
Fiscal Cliff, Global Economic Health and U.S. Growth Rate Pose Challenges –
But Senior Finance Executives Express Measured Confidence Heading into Next
NEW YORK -- December 11, 2012
With an eye toward seizing opportunities in 2013, a majority of senior finance
executives in the U.S. plan to invest in their companies to drive growth and
expect to achieve higher revenues and profits next year. In fact, a new
American Express survey of 200 U.S. CFOs and senior finance executives 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.
Clearly, the potential impact of the so-called “fiscal cliff” looms large,
with 52% 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% of senior
finance executives expect an impact on their companies’ growth plans.
“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% 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% expect increased profits. They are also confident
they will reach their goals: 84% 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% 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%
*New product and service development – 59%
*Expansion into new markets – 52%
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% of
senior finance executives anticipate spending the same or more on business
travel next year.
The most important reasons for making travel investments? 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
“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 Mr.
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% expect it to be
within the 1% to 4% range.
Consumer spending will help shore up the economy. Three in four senior finance
executives (73%) expect consumer spending to remain stable or increase.
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.
How Will The Economy Perform in 2013?
Country/Region Better Same Worse
Brazil 48% 34% 19%
China 45% 23% 33%
India 45% 32% 24%
Asia (ex. India and China) 39% 38% 24%
Russia 23% 44% 34%
UK 16% 43% 42%
Europe (ex. UK) 15% 23% 63%
About the Survey
Echo Research conducted an online survey of 200 senior finance executives at
large global companies across a wide range of industries in the U.S. from
November 12^th to 21^st, 2012. Company revenues ranged from $500 million to
more than $20 billion. Respondents were qualified if they have responsibility
(sole or shared) for at least three of the following financial tasks:
corporate planning, forecasting, and cost reporting, preparing and maintaining
financial planning reports, business initiatives (e.g. opening new operations,
asset acquisitions, new service launches), overseeing preparation of financial
statements, or coordinating the development and monitoring of budgets.
About American Express Global Corporate Payments
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. In the U.S.,
it is a leading issuer of commercial cards, serving more than 70% of the
Fortune 500, as well as tens of thousands of mid-sized companies. American
Express issues local-currency commercial cards in more than 40 countries, and
international currency cards in an additional 100+ countries. For more
information, visit www.americanexpress.com/corporate.
Christine Elliott, 212-640-0622
Sloane & Company
John Hartz, 857-598-4779
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