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Global Confidence Survey

Legends of the Fall

1Sep

There's a chill in the air, but don't blame it on the approach of autumn. Missed earnings reports, record-setting layoffs, and stock-market and productivity slides have cooled corporate enthusiasm, as only 13 percent of U.S. CFOs registered a vote of confidence in the global economy for the next year: a 53 percent drop from last quarter and an 82 percent fall from Q3 2000. More telling, 53 percent of the U.S. finance chiefs say they are concerned about near-term global prospects, and 56 percent are either concerned or very pessimistic about the domestic prognosis for the same period, according to CFO's quarterly Global Confidence Survey.


The survey, which polls finance executives in the United States, Europe, and Asia about regional and global economic issues, points to a 59 percent decline in global confidence among all respondents compared with last quarter's attitudes about the near term. An especially glum response from Asia's CFOs weighed heavily on the collective confidence. A staggering 86 percent of the Asian executives say they are either concerned or very pessimistic about the global economy during the next year, a 19 percent slip in confidence from last quarter.


Attitudes improve with time. Overall, 72 percent of the CFOs are confident or very optimistic about the global economy during the next five years: that's up from last quarter's 67 percent and closing fast on Q3 2000's 74 percent. When asked about long-term global prospects, Asia's CFOs recorded a 12 percent jump in confidence from last quarter, with 59 percent of them confident about the next half-decade. Seventy-two percent of the U.S. contingent is also confident about the next five years, registering a 14 percent rise in confidence from last quarter, while European CFOs cast the highest vote of self-assurance--78 percent--a 12 percent increase compared with Q2.


Still at the top of CFOs' minds: the economic downturn, attracting and retaining staff, and increasing competition, say the finance executives from three continents. - M.L.



CFO GLOBAL CONFIDENCE SURVEY RESULTS

Attitudes toward global economy in the short term:
United StatesEuropeAsiaGlobal
Very optimistic3n/an/a1%
Confident13%22%n/a14%
Neutral31%43%23%35%
Concerned53%35%73%49%
Very pessimisticn/an/a4%1%
Attitudes toward own region in the next year:
United StatesEuropeAsiaGlobal
Very optimistic3%4%n/a3%
Confident19%24%9%19%
Neutral22%46%5%29%
Concerned53%24%81%46%
Very pessimistic3%2%5%3%
Attitudes toward global economy in the next five years:
United StatesEuropeAsiaGlobal
Very optimistic13%22%n/a14%
Confident59%56%59%58%
Neutral22%20%27%22%
Concerned6%2%14%6%
Very pessimisticn/an/an/an/a
Next-quarter profit predictions compared with 2001:
United StatesEuropeAsiaGlobal
Up by 10%+26%32%14%26%
Up by <10% 13%36%10%23%
Down by <10% 13%9%19%12%
Down by 10% +39%n/a33%20%
No change9%23%24%19%

LOOK OUT: Acquired companies lose 10% of their workers; survivors experience slow wage growth, says The Conference Board.

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