Daily News: December 16, 2013

BofA Outlook: CFOs Optimistic, Foresee Sales Growth

CFOs are more optimistic about U.S. economic growth than they were a year ago and expect their companies’ sales to increase in 2014, with growth coming from doing more business with current customers and winning new customers, according to the Bank of America Merrill Lynch 2014 CFO Outlook survey. Nine out of ten CFOs said they expect their companies to increase or maintain the size of their workforce next year.

Amid this optimism, concerns remain about healthcare costs, which CFOs cited as having the biggest potential impact on the U.S. economy. Yet, most CFOs said their companies are mostly or completely ready to comply with the Affordable Care Act.

Of the financial executives who participated in the annual survey of middle market companies, 54% said their companies’ 2014 sales will be higher than in 2013. Another 37% expect sales to remain at the same level, while 8% expect a decline. Related to those expectations, 94% of CFOs said their companies plan to implement at least one growth strategy in 2014. Of those CFOs, 82% expect to sell more products or services to current customers, while 77% are targeting new customers or markets.

“Middle-market companies are increasingly exploring different paths to growth, from creating deeper relationships with existing customers to entering new markets that have great potential,” said Alastair Borthwick, head of Global Commercial Banking at Bank of America Merrill Lynch. “The CFO Outlook mirrors what we’ve heard in conversations with our clients: With the right strategy and financial partner, 2014 can bring more opportunities for expansion and success.”

CFOs gave the U.S. economy an average score of 53 out of 100, up from 49 a year ago; in the 2013 CFO Outlook Mid-Year Update – a smaller survey with 250 respondents – the score was 58. CFOs gave the global economy a score of 50, up from 45 a year ago and comparable to the mid-year score of 51.

Regarding economic growth, 47% expect expansion in 2014, up from 39% a year ago. In the mid-year update, 55% forecast growth. Only 12% said they expect the economy to shrink, down from 24% a year ago and similar to 10% at mid-year.

The full 2014 CFO survey report will be available in early 2014. To read the full news release click here.