“It’s time for our country’s political leaders to embrace a long-term budget solution combined with comprehensive tax and entitlement reforms in order to remove the largest obstacles to business uncertainty and position the United States for a sustained economic recovery.”
The results come on the heels of what had been a slow increase in confidence in the U.S. economy during the past year, with 45 percent of respondents believing the state of the economy would improve in the firm’s spring survey, compared to just 31 percent in the fall of 2012 and 25 percent in the summer of 2012.
“The declining confidence and uncertainty in the performance of our economy shouldn’t be surprising given the recent gridlock surrounding our nation’s budget and debt ceiling negotiations,” said Stephen Chipman, chief executive officer of Grant Thornton. “It’s time for our country’s political leaders to embrace a long-term budget solution combined with comprehensive tax and entitlement reforms in order to remove the largest obstacles to business uncertainty and position the United States for a sustained economic recovery.”
Notably, 24 percent of CFOs cited funding the government and/or replacing across-the-board spending cuts known as “sequestration” as their most important legislative priority, while 24 percent point to the need for reforming the tax code.
Unfortunately, uncertainty extends throughout the survey findings, with 56 percent of those surveyed predicting that industry financial prospects will remain the same or worsen, revealing no change since the spring. The number of CFOs who believe the pricing or fees charged by their industry will remain the same or decrease also remained the same from the spring at 63 percent.
However, when CFOs were asked about employment opportunities in the next six months, 43 percent said their company’s headcount would increase or significantly increase, a moderate three-percentage point increase from the spring. In addition, more than two-thirds of CFOs (68 percent) expect the average cost of an employee’s salary to increase during the next 12 months, up from 65 percent in the spring.
Source: Grant Thornton