CFO concern about overall U.S. business conditions remained extremely high in October, according to the monthly survey results just in from corporate-finance services and recruiting firm Tatum.
The overall business-conditions index that Tatum has established to reflect numerous factors actually increased in October -- to 1.8, from the two-year low of 1.7 in the prior month. Still, Tatum considers a 2.0 to 3.0 range as representing zero economic growth. And the September results, which Tatum had called "sour," showed a disturbingly sharp drop in the way CFOs perceived business condtions.
For the next 60 days, 36% of respondents expect an improvement in business condtions, compared with 37% in the prior month.
“Have we entered into another recession?” ask the analysts from Tatum, the executive services and search firm that specializes in the corporate finance function. “Our survey respondents seem to expect it and are reacting accordingly.”
Stagnation at Two-Year Low Levels Whether another recession develops or not, says Tatum of the latest October results, the stagnation of the numbers at levels that prevailed during the recessionary depths two years ago shows that “our respondents are reporting low-to-negative growth and are reacting accordingly.”
Noting that September respondents had at least indicated that they intended to raise their cap-ex, and to increase hiring, for example, Tatum said that in October such commitment had dissolved.
Among the 111 finance executives across the country who participated in the survey -– mostly from small or medium-sized businesses -– 19% said they had committed higher amounts to capital spending, down from 23% in the previous month. Those who said they commited less climbed to 22% from 16%. Looking ahead, the question about cap-ex expectations for the last two months of 2011 similarly showed a decline in the percentage of CFOs planning to spend more.
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