For the first time since 2010, senior finance executives across global regions are more aligned in their predictions of economic expansion, according to recent research from American Express (NYSE:AXP) and CFO Research. Overall, 72% of respondents predict economic expansion this year, while 17% say they plan to pursue aggressive spending and investment plans, compared to just 10% last year. As a further indication of their confidence, only 3% say they plan to decrease spending, down from 8% last year.
The findings in the seventh annual American Express/CFO Research Global Business and Spending Monitor are based on a sampling of senior finance executives based in North America, Europe, Latin America, Asia and Australia.
European CFOs – whose economic expectations had been trending downward since 2010 – are now indicating a more positive outlook for growth. European confidence in the economy this year surged, with 68% of senior finance executives predicting economic expansion in their respective countries, up from 48% in 2013. The European region’s economic expectations are now closer to the expectations reported in Asia (down from 80% in 2013 to 70% in 2014) and Latin America (down from 80% in 2013 to 79% in 2014).
The U.K. accounts for part of the significant boost in optimism seen in Europe. Ninety-three percent of U.K. respondents are predicting economic expansion in 2014, compared to just 50% the prior year. This increase is likely the result of improvements in the U.K. economy over the past year, including several consecutive periods of GDP growth. Still, it may be some time before this improving outlook translates into increased spending and hiring. While 70% of European respondents say they plan to spend the same or more this year on headcount, just 60% of U.K. CFOs say the same – down from 64% last year. While other countries also saw slight drops in plans for headcount spending, the overall trend remains positive. Three-quarters of the finance executives surveyed (75%) say they plan to spend the same or more on headcount this year.