Daily News: May 4, 2012

GE Capital: General Manufacturing CFOs Optimistic


General manufacturing CFOs are more optimistic about the current state of their industry as well as that of the overall U.S. economy, according to the latest U.S. Mid-Market CFO Survey by GE Capital. Their opinion of the current state of the global economy declined slightly. Of all CFOs surveyed, those in general manufacturing are the most optimistic about the U.S. economy, with 65% saying it will grow, up 30 points.

Additional findings:

  • Industry growth – Forty-seven percent of CFOs expect their industry to grow in the next 12 months, up 18 points.

  • Revenues – Seventy-six percent expect revenues to be greater in 2012 than in 2011, up 14 points.

  • Profit margins – More CFOs expect either similar or greater profits in 2012 compared to 2011 (48% and 37%, respectively, up from 39% and 33%).

  • Pricing – Sixty percent expect to increase the pricing of their products or services this year compared to 51% of all CFOs who were surveyed.

  • Capital expenditures – Fifty-six percent of CFOs plan to maintain 2011 cap-ex levels this year, up 21 points.

  • Cost structure – CFOs are relatively split between those who expect their cost structure to increase this year compared to last year (46%, down 12 points) and those who expect their costs to remain similar to 2011 (40%, up 12 points). Twelve percent predict a decrease.

  • New order pipeline – Forty-two percent say their new order pipeline is similar today compared to this time last year, up 15 points. Forty-four percent say their pipelines have increased, down from 55%.

  • M&A – Forty-four percent of CFOs anticipate increased M&A activity this year, down one point.

  • Financing – Eighty percent of CFOs expect their financing needs (including loans, leases and other credit facilities) to be stable in 2012. Most (70%) expect their cost of capital to remain the same as in 2011.

  • Additional financing – Thirty-four percent are planning to take on additional financing for organic growth, 33% to acquire equipment and 29% for working capital purposes.

  • Hiring – Sixty-seven percent have already begun hiring this year. Seventy-five percent plan to make additional hires in the next 12 months, up 17 points.

    For more detailed GE Capital Middle-Market CFO Survey results click here.