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CFO survey points to dramatic upswing ahead for U.S. business conditions

Roy Harris | Dec. 13, 2011
After offering mere hints in October of a possible upturn in U.S. business conditions, the Tatum November survey of CFOs now presents evidence that corporate activity could be about to help lead a recovery.

"But these developments alone do not explain the breadth of change," Tatum's summary said.

Order-Backlog Positives

In specific areas surveyed, order backlogs were a particular positive highlight. Over the past 30 days, those reporting improvement soared to 28% from 14%, while only 15% saw worsening backlogs, down from 23% in October. For the 60-day outlook, 37% expected improving backlogs, off from 39%. But those expecting poorer backlogs fell to 6% from 12% in October --- and off from 21% in September.

In terms of employment, 18% said they had hired more workers in November, up from 15%, while 14% said hiring had shrunk, down from 18% in October. Those expecting to increase hiring over the next two months rose to 26% from 24%, while those anticipating hiring declines dropped to 12% from 18%

Capital availability measurements scored gains, with 17% of CFOs saying financing conditions had improved in November, up from 13% the prior month. Those saying condition had worsened fell to 13% from 15%.

But for the next 60 days, 20% of respondents said they expected improvement -- up from 12% feeling that way in October. Those saying conditions were likely to worsen registered 11%, compared with 12% in the prior month.

Strong CFO-CIO Communication

In a special series of questions that Tatum asked, in conjunction with, CFO respondents showed 42% valuing the communication with their company's chief information officer as strong, although only 7% called it very strong. Those registering a poor degree of communication totaled 26%, with 1% calling the communication very poor.

Asked what the causes of any communication gaps between IT and the finance department might be, 65% said that goals often were not in alignment with objectives, while the next most-popular answer (34%) was that the structure of IT doesn't nurture communication, and 31% said IT people were too technical when speaking with others.

Asked what areas required the highest degree of good communication, data security ranked first (63%) with data accessibility next (48%) and IT simplification/integration and IT costs tied for third (37%.)


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