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CFOs Rate U.S. Economy at Highest Level Since Recession

... and CFOs Predict Higher Sales, Expansion and New Full-time Hires According to Bank of America Merrill Lynch 2015 CFO Outlook.

"CFOs expect to dedicate more time to activities aligned with growing and protecting their companies. From sales to risk management, healthcare costs to employee retention programs, they are leveraging their broad base of knowledge to influence decisions across their company."

CFOs believe the U.S. economy is at its highest level since the 2008 recession and anticipate growth in their sales, workforce and companies in 2015, according to the Bank of America Merrill Lynch 2015 CFO Outlook survey results released today.

In the survey of 603 financial executives with annual revenues ranging from $25 million to $2 billion, a majority of CFOs report the outlook for their companies as increasingly positive. Important findings include:

The U.S. economy
On a 100-point index, with zero being extremely weak and 100 being extremely strong, CFOs give the U.S. economy an average score of 59, a marked increase from the 53 reported in the 2014 CFO Outlook and the highest level since the recession in 2008.

CFOs report that they are more optimistic that the economy will expand in 2015 than they have been in the past four years. Fifty-two% forecast expansion next year (vs. 47% for 2014) and another 37% expect the economy to remain stable.

When CFOs were asked to evaluate certain factors in terms of their potential impact on the U.S. economy in 2015, healthcare costs were most cited (56%), which is down considerably from 2014 (67%). New to the survey this year, 45% of CFOs express concerns about the effects of global conflict on the U.S. economy. Notably, companies with no foreign market involvement are more likely to be concerned with this issue (50%), while companies with foreign operations are less concerned (40%).

For the first time in seven years, more than half (52%) of CFOs report they expect to hire additional full-time employees in 2015; 44% have no plans to change the size of their workforce.

CFOs report their companies are investing in retaining and attracting qualified employees by providing benefits, including 96% offering healthcare insurance; 92% funding retirement programs; and 87% offering bonuses or other compensation. More than half also offer wellness programs (63%), education funding (54%) and flexible work hours (52%).

Sales growth is expected by 63% of CFOs in 2015, up significantly from 54% for 2014. Sixty-three% of companies surveyed expect to grow exclusively in the U.S.; the remaining 37% anticipate both domestic and international growth.

To encourage and foster growth, 96% of U.S. companies are implementing one or more of the growth strategies presented in the survey; market penetration (82%) and market expansion (74%) are the most popular strategies. Forty-one% expect their profit margins to increase, and 45% believe they will remain the same.

Overall, 54% of companies have some foreign market involvement. The top two regions in which U.S. manufacturers currently have foreign operations are Europe (70%) and Asia (69%), but manufacturers are looking to establish new operations in Latin America (16%), Asia (15%) and Europe (14%). U.S. manufacturers are most likely to grow internationally by setting up an in-market subsidiary (50%), while non-manufacturing companies will likely participate in a joint venture (48%).

“With a steadily improving economy as a backdrop, growth is top of mind for CFOs in 2015,” said Alastair Borthwick, head of Global Commercial Banking at Bank of America Merrill Lynch. “Companies are moving from maintaining their position to growing in earnest by hiring new employees and taking steps to expand.”

Other key findings:

Corporate outlook
CFOs overwhelmingly feel optimistic about their companies in 2015. Seventy-four% report a positive outlook, while another 18% view their company’s outlook as stable.

Healthcare and benefits
Sixty-nine% of companies report that they expect their labor costs to rise to cover the costs associated with the Affordable Care Act, up from 53% last year. In order to offset their long-term healthcare costs, companies will pass along these costs to employees (79%), implement preventative healthcare and wellness programs (66%), cut spending in other areas of their business (61%), offer employees health savings accounts (HSA) (59%) and raise prices on their products and services (50%).

Risk management
The majority of companies surveyed indicated that they have plans in place to mitigate risks they face. The most common risk management programs address data security (92%), disaster coverage/protection (88%), other types of fraud (83%) and operational risk (81%). Approximately two-thirds of companies have plans in place to address succession planning, technical/intellectual property protection and reputational risk.

Evolving role of the CFO
The role of the CFO is evolving from primarily financial to a more holistic view of the company according to a new segment of the survey this year. More than half (52%) of CFOs report that the time they spend on strategic issues is increasing. Currently, they spend two-thirds of their time on tactical activities and one-third on strategic activities.

The specific strategic activities on which CFOs spend the most time are: technological advances (61%), risk management (60%) and data management (59%). Also mentioned were human resources issues (49%) and communications strategies (40%).

“Results from the survey confirm what we have seen with our clients,” Borthwick said. “CFOs expect to dedicate more time to activities aligned with growing and protecting their companies. From sales to risk management, healthcare costs to employee retention programs, they are leveraging their broad base of knowledge to influence decisions across their company.”

Since 1998, Bank of America Merrill Lynch has regularly surveyed financial officers at U.S. companies to better understand how they view the economy. The 2015 CFO Outlook was conducted by Granite Research Consulting. Interviews were conducted from September to October 2014. The statistical range of error is +/-4%.

Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small businesses, middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 48 million consumer and small business relationships with approximately 4,900 retail banking offices and approximately 15,700 ATMs and award-winning online banking with 31 million active users and more than 16 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which is a registered broker-dealer and member of SIPC, and, in other jurisdictions, a locally registered entity. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.

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Vendredi 12 Décembre 2014