CFOs bullish on the economy, but not health coverage

A survey by Financial Executive International showed CFO optimism on the economy increased by 33 percent in the first quarter of 2010. 

Its Optimism Index plotted CFO's bright outlook at a 58.14, up from 38.96 a year ago, as they predict double-digit percentage increases in net earnings over the next 12 months. 

However, they still remain cautious in their outlook for the overall health of the economy, and they continue to examine and reevaluate staffing, layoffs, and compensation. Issues surrounding healthcare remain foremost on their minds as the new healthcare law is expected to create added costs for companies that may result in difficult sacrifices for employees. 

According to the survey, CFOs are anticipating an 8 percent increase in costs directly related to the healthcare law and they foresee that these added costs will force them to act in ways that could be detrimental to their employees or retirees. Over 60 percent of respondents said they may increase employee's co-pay as a result of the new law, 48 percent indicated they would need to reduce the quality of the health care, and 46 percent said they might have to reduce benefits.