The Economy

CFOs More Bullish About U.S. Economy

Thirty-eight percent of CFOs identified health care as their biggest concern, followed by increased competition and skilled-labor shortages.
Matthew HellerAugust 4, 2015
CFOs More Bullish About U.S. Economy

CFOs of middle-market companies continue to become more confident about the U.S. economy, according to a Bank of America Merrill Lynch survey.

On a 100-point index, with zero being extremely weak and 100 being extremely strong, CFOs gave the U.S. economy an average score of 63. In the previous survey, conducted at the end of 2014, the average score was 59, the highest since the recession in 2008.

“There’s growing confidence and accelerating momentum,” Alastair Borthwick, head of global commercial banking at BofA, told The Wall Street Journal. “Our clients’ concerns continue to diminish.” Neteller Casinona:

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

Those concerns have included ongoing problems in Europe, a possible U.S. government shutdown, and China’s stock market plunge and slowing economy. But the United States and Europe have stabilized in the past few months and China’s problems haven’t yet affected middle-market companies.

“China won’t materially impact company earnings today or in the next six months,” Borthwick predicted.

Overall, 38% of CFOs identified healthcare as their biggest concern, followed by increased competition, and skilled-labor shortages, cited by 32% each.

Borthwick said the growth in business confidence is being reflected in M&A activity. Companies have announced $2.6 trillion of deals so far this year, the most for any similar period since 2007, according to data provider Dealogic.

In addition, corporate borrowing is increasing. BofA had average loans and leases of $147.2 billion on its balance sheet during the second-quarter, up 4% from a year ago.

A group of 250 CFOs at companies with sales between $25 million and $2 billion responded to the survey, which was conducted between mid-May and mid-June.