October 13, 2011

Global Company Executives Rate their Confidence

in the U.S Economy as “Average”

 82 percent of CFOs say uncertainty in the U.S. business economy has grown

Washington, DC- According to the 2011 CFO survey, U.S. Economy Confidence Rating, commissioned by the Organization for International Investment (OFII), senior executives at U.S. subsidiaries of foreign companies say the United States rates “middle of the road” when it comes to their confidence in investing in the U.S. In fact, on a scale of 1 to 25 (with 25 being the highest), the CFOs surveyed scored the U.S. at just above a “14” on the confidence rating scale.

 Similar to last year’s results, nearly half of the CFOs stated they expect to increase employment in the United States over the next 12 months.  However, an overwhelming majority believe uncertainty in the U.S. business environment is greater today than it has been in prior years.  At the U.S. federal level, the biggest sources of this uncertainty are the political environment and tax policy.  Regarding U.S. federal tax reform, CFOs say changes to the U.S. corporate income tax rate will have the most impact on investment decisions.

 “The views of these senior executives are a barometer for how the world currently views doing business in the United States,” said OFII President & CEO, Nancy McLernon. “And, this lukewarm attitude does not bode well for the U.S. economy right now.  U.S. subsidiaries of global companies are significant employers in this country, directly employing more than five million American workers.  They could contribute even more to job creation if efforts are stepped up to attract global investment.”

OFII commissioned PricewaterhouseCoopers LLP (PwC), the assurance, tax and advisory services firm, to conduct the annual survey, which is based on 100 responses from the CFOs at the U.S. subsidiaries of foreign companies.

Key Survey Findings:

• CFOs Give the U.S. Economy a Confidence Rating Score of 14 out of 25
  On a scale of 1 to 25, where 25 is the best possible rating, CFOs' confidence in investing in the U.S. economy scored, on average, just above 14.
  
  
• Nearly half of the CFOs plan to increase U.S. employment over the next 12 months:
  Similar to last year’s results, nearly half of the CFOs stated they expect to increase U.S. employment over the next 12 months (46% in 2011 vs. 49% in 2010).
  
  
• Over eighty percent of the CFOs surveyed said uncertainty in the U.S business environment is greater compared to prior years
  82% of the CFOs surveyed said uncertainty in the U.S business environment is greater compared to prior years and that the primary source of this uncertainty is the policies and practices of the U.S. federal government rather than those of U.S. state and local governments.
  
  
• However, compared to last year, CFOs say they are actually less pessimistic about the U.S. business environment for foreign companies
  40% believe the environment is deteriorating compared to 72% last year.
  
  
• CFOs at U.S. subsidiaries of foreign companies said when it comes to U.S. federal tax reform policy, the U.S. corporate income tax rate has the most impact on investment decisions
  
  
• In comparison to other countries, CFOs believe the U.S. business climate is losing ground
  This year only 23% of CFOs rank the U.S. business environment as stronger than other countries (compared to 39% last year), and 36% rank it as weaker than other countries (compared to 28% last year).
  
  
• Key factors for CFOs when making location decisions for major investments around the world are:
  • Knowledgeable/skilled workforce 
  • Corporate tax system
  • Political environment 

 Click to see the full OFII CFO Survey results, U.S. Economy Confidence Rating

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The Organization for International Investment is a Washington-based business association representing U.S. subsidiaries of global companies. For additional information, see OFII’s web site at www.ofii.org.