Financial officers express optimism for 2015

The nation’s chief financial officers are upbeat about the growth of their businesses as well as the broader economy this year, a new survey showed on Tuesday.

CFO’s posted the eighth straight quarter of optimism about their organization’s prospects, with expectations for growth in earnings, sales and hiring in 2015, according to Deloitte’s fourth quarter survey.

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In the final three months of last year, 49 percent of CFOs expressed improving optimism, an increase from 43.7 percent in the July-September quarter, and the highest level of optimism for all of 2014.

“CFOs hold a positive outlook for 2015, despite domestic and global uncertainties remaining on the horizon,” said Sanford Cockrell III, national managing partner, Deloitte.

"Key metrics look consistently stronger and confidence in the North American economy is increasing," Cockrell said.

The survey tracks the expectations of 100 CFOs from large North American companies.

Only 15.6 percent of CFOs expressed declining optimism, one of the lowest rates in the survey’s 19-quarter history.

Confidence in the North American economy remained high with 63 percent of CFOs describing it as good or very good, and 63 percent believing conditions will be better in a year.

The financial officers expectations for sales growth rose to 6 percent from 4.1 percent a year ago, though they decreased from 6.8 percent in the last quarter.

Earnings expectations increased to 9.7 percent from 8.6 percent a year ago, though again falling from 10.9 percent last quarter.

However, CFOs remain cautious about about industry regulations, government policies, equity market valuations and the performance of the European and Chinese economies.

They also expressed growing concern about interest rates and tax reform.

Industry-specific regulation (69 percent), monetary policy (55 percent), geopolitical events (49 percent) and fiscal policy (40 percent) were all flagged by CFOs as having a greater impact on business planning.

In looking at the global economy, 73 percent described the European economy as bad up from 47 percent in the third quarter and just 13 percent last year.

Views on China remained mediocre, with 34 percent saying the economy is good and 25 percent expecting improvement in the next year.

Despite global economic concerns, only around a quarter of CFOs said the European and China situations are affecting their business planning.

That optimism about the economy will lead to price increases, the CFOs said. 

Overall, 55 percent of CFOs confirmed they will raise prices this year, compared with just 18 percent who say they will be lower.

While 72 percent of CFOs expect interest rates to be higher in a year, only one third say this issue is affecting their pricing.

Also, only 27 percent confirmed that energy prices are affecting their pricing.