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U.S. CFOs Remain Cautious About The Economy In Bank Of America Merrill Lynch 2013 CFO Outlook

Financial executives at U.S. companies continue to be concerned about the economy, with only two out of five executives expecting growth in 2013, according to the Bank of America Merrill Lynch 2013 CFO Outlook.

The 602 executives who participated in the 15th annual survey gave the U.S. economy an average score of 49 out of 100, up from 44 in the 2012 report. CFOs gave the global economy a score of 45, up from 43 a year ago.

Optimism about economic growth remained muted, with only 39 percent of CFOs predicting expansion in 2013, compared with 38 percent last year. Perhaps more telling, 24 percent of executives said they expect the economy to contract this year, up significantly from 11 percent in 2012.

“It is clear that uncertainty continues to linger among CFOs, which is understandable given the broader economic issues both in the U.S. and overseas,” said Alastair Borthwick, head of Global Commercial Banking at Bank of America Merrill Lynch. “Until they see solid evidence of stability, CFOs will be guarded in their optimism and growth plans. Expansion still is possible but may be limited in the short term to certain industries and markets.”

Despite concerns about contraction, most CFOs expect their companies to avoid layoffs in 2013. Only 8 percent predicted a reduction in workforce, compared with 7 percent last year. Meanwhile, 48 percent said they expect to maintain the current number of employees, while 45 percent said they expected to hire employees. Both responses are similar to last year’s survey.

In Oregon, retailer Coastal Farm & Ranch is exploring the possibility of adding to its 12 stores this year. If that expansion happens, the company would need to hire more employees to meet increased customer demand. “With more homeowners choosing to grow their own produce or raise chickens and other animals for food, we’ve seen more interest in our products and services,” said Buzz Wheeler, Coastal Farm & Ranch’s chief executive. “Many people still may be worried about the overall economy, but we’re optimistic this year will bring plenty of opportunities.”

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