Optimistic about the U.S. economy, the nation’s CFOs say they expect their company will grow sales and profit next year and will add full-time employees.
The Bank of America Merrill Lynch 2016 CFO Outlook surveyed 500 chief financial officers on the state of the economy and their outlook for 2016. Collectively they scored the U.S. economy at 61 (out of 100), the highest since the recession. They rated the global economy at 49, down two points from last year’s 51.
More than half (54 percent) report they will be adding employees in the new year, a two point increase over last year. Only 5 percent see their workforce shrinking. In the 2008 survey, a mere 23 percent expected to add staff in the year ahead.
They also expect labor costs to increase by an average of 5 percent, down from 7.1 percent last year.
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“CFOs continue to be optimistic about the U.S. economy and their own companies,” said Alastair Borthwick, head of Global Commercial Banking at Bank of America Merrill Lynch. “This is consistent with what we’re hearing from our middle-market clients. It‘s significant that more than half the companies surveyed are investing their resources to hire new full-time employees, for the first time since the recession, as a means to support their anticipated growth.”
Nearly all the CFOs are predicting company growth next year. Half forecast it to be in the range of 1 to 5 percent, while 39 percent expect it to be even higher. Most also expect company profits to be about the same as this year (50 percent) or better (35 percent). And 89 percent expect their company’s sales to increase next year.