Executive Briefings

Transportation CFOs Upbeat About Economy, Survey Finds

Chief financial officers in the transportation industry have grown more optimistic about their industry and the overall economy, according to GE Capital's latest Middle Market CFO survey.

"There's a positive feeling in the industry now, and the Christmas shipping season seems to be fairly good," says Dan Clark, president and general manager of GE Capital, Transportation Financial Services. Still, some 500 CFOs - including some not in the transportation industry - across seven industries have some concerns. "Their biggest opportunity was raising revenue per loaded mile "” that tells us that capacity is still very tight. At the same time, we're still seeing concerns about the impact of fuel prices, regulation and healthcare."

On average, the respondents have revenues of $13m and an employee count of 84. Unless otherwise noted, data comparisons are being made to the last wave of the GE Capital Mid-Market CFO Survey executed in the first quarter of 2012.

Some major findings:

Economic growth - Eighty-two percent say the U.S. economy will grow or stay the same over the next 12 months, a decrease of 10 points.

"¢ Company growth - Eighty-two percent of CFOs expect limited to moderate company growth over the next 12 months, down 2 points.

"¢ Revenues - Forty-four percent expect their company's revenues to increase this year compared to last year, down 26 points. Thirty-eight percent expect revenues to remain the same, up 15 points.

"¢ Cost structure - Transportation CFOs (65 percent) have the highest expectations across all industries of increasing cost structure (up 5 points).

"¢ Business concerns - Transportation and healthcare CFOs lead all industries (87 percent) regarding concerns about the impact healthcare costs will have on their business over the next 12 months.

"¢ Pricing - Transportation CFOs lead all industries in their plans to raise prices (56 percent).

"¢ Hiring - Seventy-nine percent expect to hire in the next 12 months, the most bullish of all industries.

"¢ Equipment - Transportation CFOs lead all industries considering plans for financing for equipment (67 percent, down 1 point).

"¢ Credit availability - Transportation CFOs experienced the largest increase in credit availability across all industries (35 percent cite an increase, up 12 points).

Questions asked only of transportation respondents:

"¢ Concerns - Fifty-eight percent are most concerned about the impact fuel price volatility will have on their business (down nine points), followed by 56 percent who are most concerned about the impact of safety/truck accidents.

"¢ Regulations - When it comes to the impact of regulations on their business, 52 percent say they are most concerned about hours of service rules, followed by 37 percent who are most concerned about safety rules.

"¢ Business opportunities - In 2012, the greatest business opportunities are increasing average revenue per loaded mile (68 percent, up nine points) and increasing tonnage volume from existing customers (62 percent, up five points).

Source: GE Capital

 

"There's a positive feeling in the industry now, and the Christmas shipping season seems to be fairly good," says Dan Clark, president and general manager of GE Capital, Transportation Financial Services. Still, some 500 CFOs - including some not in the transportation industry - across seven industries have some concerns. "Their biggest opportunity was raising revenue per loaded mile "” that tells us that capacity is still very tight. At the same time, we're still seeing concerns about the impact of fuel prices, regulation and healthcare."

On average, the respondents have revenues of $13m and an employee count of 84. Unless otherwise noted, data comparisons are being made to the last wave of the GE Capital Mid-Market CFO Survey executed in the first quarter of 2012.

Some major findings:

Economic growth - Eighty-two percent say the U.S. economy will grow or stay the same over the next 12 months, a decrease of 10 points.

"¢ Company growth - Eighty-two percent of CFOs expect limited to moderate company growth over the next 12 months, down 2 points.

"¢ Revenues - Forty-four percent expect their company's revenues to increase this year compared to last year, down 26 points. Thirty-eight percent expect revenues to remain the same, up 15 points.

"¢ Cost structure - Transportation CFOs (65 percent) have the highest expectations across all industries of increasing cost structure (up 5 points).

"¢ Business concerns - Transportation and healthcare CFOs lead all industries (87 percent) regarding concerns about the impact healthcare costs will have on their business over the next 12 months.

"¢ Pricing - Transportation CFOs lead all industries in their plans to raise prices (56 percent).

"¢ Hiring - Seventy-nine percent expect to hire in the next 12 months, the most bullish of all industries.

"¢ Equipment - Transportation CFOs lead all industries considering plans for financing for equipment (67 percent, down 1 point).

"¢ Credit availability - Transportation CFOs experienced the largest increase in credit availability across all industries (35 percent cite an increase, up 12 points).

Questions asked only of transportation respondents:

"¢ Concerns - Fifty-eight percent are most concerned about the impact fuel price volatility will have on their business (down nine points), followed by 56 percent who are most concerned about the impact of safety/truck accidents.

"¢ Regulations - When it comes to the impact of regulations on their business, 52 percent say they are most concerned about hours of service rules, followed by 37 percent who are most concerned about safety rules.

"¢ Business opportunities - In 2012, the greatest business opportunities are increasing average revenue per loaded mile (68 percent, up nine points) and increasing tonnage volume from existing customers (62 percent, up five points).

Source: GE Capital