Since the Great Recession finance executives’ confidence in the U.S. economy has never been higher and now have adopted a ‘spend-to-grow’ attitude. The U.S is joined by finance executives in India, Spain, China and Brazil wherein at least 75% of the top executives express the same optimism.
According to a new study from American Express and CFO Research seven in ten U.S. finance executives report that their companies’ revenues are higher now than a year ago, and U.S. finance leaders rank among the most optimistic in the world, with 83% predicting economic expansion. Finance executives’ confidence in the U.S. economy has grown each year for the last three years, and the current level represents a high-water mark for U.S. companies over the entire eight years of the survey.
While the U.S. economy is climbing back steadily, Canadian finance executives are less confident in their economy than their American counterparts (73% for Canadian respondents, up significantly from 62% in 2013, vs. 83% for the U.S. in 2015). However, Canadian businesses are gearing up to invest in growth at even higher levels than in previous years. The combined outlook for the U.S. and Canada sets the North American region apart from other regions as economies and companies attempt to rebuild from the aftermath of global recession.
On average, North American respondents expect their company’s planned level of spending and investment to increase by 8%. At the country level, Canada averages higher at 11% while the U.S. average is 7%.
Canadian businesses, in particular, are positioning themselves to forge ahead in the pursuit of expanded sales. The proportion of Canadian respondents planning to increase investment in new product and service development has soared to 60% this year, a significant jump over the 17% reporting planned increases in 2014. Canadians also show similar surges in plans to boost sales and marketing activities (45% of Canadian respondents this year vs. 24% last year).
American finance executives, however, plan to take a different path towards growth, saying that they expect to increase investment in mergers and acquisitions (M&A). Forty percent (up from 28% last year) say their companies plan on increasing investment in M&A activity, compared with 28% of all respondents to this year’s survey. The U.S. is one of the few countries where respondents give approximately the same weight to increasing investment in M&A as to increasing investment in either sales and marketing activities (39%) or new product and service development (36%).
Across Europe, growth expectations are mixed. In Spain, 81% expect economic expansion this year (up from 69% in 2014 and 44% in 2013). Respondents from France, however, had the lowest level of confidence of any country in the survey – only 29% of French executives believe France will enjoy positive economic growth in 2015. Germany (67%, down from 74%) and Russia (55%, down from 62%) both experienced less dramatic declines. Confidence in economic expansion in the United Kingdom appears to have fallen off, perhaps due to the fact that this May sees a general election in the U.K. Nearly three-quarters (74%) of this year’s U.K. respondents expect expansion in the U.K. economy, down from 93% in 2014.
More than two-thirds of financial executives in Asia/Australia (67%, down from 70% a year ago) predict expansion in their economy. While India leads the world in economic confidence (94%, up from 86% in 2014 and 78% in 2013), China’s confidence has dropped significantly since 2013 to 78% (down from 94%) and Singapore has also experienced a decline (70%, down from 82% last year and 78% in 2013). Executives from Hong Kong and Japan were each nearly evenly split between those anticipating economic expansion (50% and 52% respectively) and those expecting no change or expecting contraction in their economies (50% and 48% respectively).
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