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US CFO survey: Optimism abounds

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US CFO survey: Optimism abounds

Market penetration and expansion are key to middle market growth strategies in 2015.

According to a recent survey of US CFOs by Bank of America Merrill Lynch, economic optimism is at its highest level in more than six years.

In fact, the survey results indicated that a majority (52%) of CFOs believe the US economy will expand in 2015, compared to only 33% two years ago.

Middle market companies are also anticipating growth.

“The annual survey indicates that the US economy may be on the verge of a breakthrough,” said Alastair Borthwick. “After years of slow growth, US economic ratings are nearing pre-recession highs.  Most respondents anticipate domestic economic expansion and plan to hire new full-time workers.”

Adding to the air of optimism is the fact that nearly all US economic concerns of CFOs have abated somewhat over the last year, including worries about healthcare costs, government effectiveness, regulation, the budget deficit and consumer confidence.

Concerns about corporate tax rates, however, have increased.

As a result, the survey indicates, company growth expectations have increased.  Most companies surveyed anticipate growth between 1% and 10% during 2015, and 63% expect sales growth this year, as compared to only 54% last year.

Profitability is also expected to increase, with 41% of CFOs expecting rising profit margins in 2015.

Middle market companies are also anticipating growth, with 82% indicating that their key strategy will be increasing market penetration, while 74% also cite market expansion as a key strategic aim.  Interestingly, only 22% of respondents cited M&A as a key growth strategy.

For the full report, click here.

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