Many companies around the world are gearing up for a spending spree — unless they happen to be located in Japan. That is one of the conclusions from the results of the Duke University/CFO Magazine Business Outlook survey conducted in June.

The survey gauged the second-quarter economic and business outlooks of more than 1,200 finance and other corporate leaders from companies of all sizes. The survey covers selected countries from all regions of the world: North America, Latin America, Europe, Asia, and Africa.

In most of the regions, a plurality of respondents say that their companies will begin to consume some of their cash reserves over the next 12 months. (See Figure 1.) In the United States and Europe, about four in ten respondents agree that their firms are likely to begin deploying their cash reserves in the coming year. That sentiment is shared by 50% of the respondents in China and 56% of the corporate executives in Latin America.

The lone exception is Japan, where only 13% of the executives surveyed think their companies will spend some of their cash reserves. More than half (52%) indicate that their companies will be hanging on to their cash, and the rest (36%) remain uncertain what the future will hold.

Where are companies’ current cash levels? Respondents from Latin America (42%) and China (43%) were the most likely to say that their companies have less cash and cash equivalents on their balance sheets today than a year ago. (See Figure 2.) With these respondents also the most likely to say they expect to continue to deploy their cash reserves, the spending of reserves is, for the most part, a continuing trend.

Executives from the United States and Europe were most likely to report that their companies are staying the course, compared with a year ago. That may be indicative of the relative economic stability in those regions compared with Latin America and Asia.

The responses of Japanese firms suggest that they are continuing their conservative approach to cash management. Nearly six in ten respondents from Japan (59%) say that their companies are holding more cash and marketable securities today than they held a year ago. That number is approximately 20 percentage points higher than seen anywhere else in the world.

Spending to Grow

For the most part, finance executives expect to use their cash to bolster capital spending and investment. That is the top choice for the use of cash reserves by half or more of the respondents from the U.S., Europe, and China. (See Figure 3.) As they cope with a stubbornly sluggish world economy, these companies may now believe their cash is better used to spur growth than to stockpile as a buffer against a new recession.

In China and the United States, acquisitions are favored as a path to further growth. In China, in particular, 50% of executives expect to use their cash reserves to fund their acquisition strategies. And that nation’s respondents additionally are targeting organic growth-inducing activities such as R&D, marketing, and advertising. Those plans may reflect a renewed determination to overcome the slowdown in economic activity that China has recently begun to experience.

In Europe, companies are more likely to return cash to shareholders in the form of dividends and share repurchases (41%). But about one-quarter of the respondents there (26%) still have a need to use cash to cover operating losses, as the region continues to struggle in the aftermath of the economic downturn. (Note: This quarter’s survey concluded just before the United Kingdom voted to exit the European Union.)

Companies in Latin America have a similar need, with 30% of the respondents from the region saying they will allocate cash to cover operating losses. The top choice in Latin America, however, is the use of cash reserves to pay down debt or lines of credit (50%), which likely has accumulated as the region’s economies have struggled with political turmoil and recession.

Caution in Japan

Companies in Japan are the contrarians in this quarter’s survey. As successive governments continue to churn out new policies in their attempts to lift the economy out of stagnation, executives deem it wise to stay highly liquid.

Half of the respondents in Japan say they do not need cash reserves as a source of funds. Since nearly 60% of this quarter’s respondents from Japan indicate that they have been building up their cash reserves over the past year, their reluctance to use them is a sign of continuing conservatism.

Other reasons the Japanese respondents give for hanging on to their cash include keeping it as a liquidity buffer in case credit markets tighten and saving it as dry powder for future investment opportunities. They also cite a lack of attractive opportunities in the current market. All of those reasons suggest that many executives in Japan continue to have doubts about the efficacy of shifting economic policies in their government.