The nation's companies are cutting expenses, employees and capital expenditures, and their chief financial officers don't expect that to change any time soon.
In the quarterly Duke University/CFO Magazine Global Business Outlook Survey, 71 percent of the CFOs questioned said they don't expect the economy to turn around until 2009, and more than half said it will take until at least the middle of next year.
Meanwhile, facing higher costs and slowing consumer spending, many companies are also planning to raise the prices they charge.
“For consumers, I don't think it's too good,” said John Graham, director of the survey and finance professor at the Duke Fuqua School of Business. “Companies expect to increase their prices by about 4 percent. That's the highest number we've had in years. Wages are only expected to increase by about 3.1 percent.”
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The survey questioned 1,051 CFOs of companies in a wide range of industries throughout the United States, plus Europe and Asia. Research concluded on June 13. Among the other results reported:
Nearly half of companies are passing on higher fuel costs to customers in the form of higher prices.
59 percent of CFOs said credit is hard to obtain.
CFOs surveyed expect to reduce their work forces by 0.2 percent over the next year while raising the prices of their products by 4.1 percent.
Nearly 40 percent of firms have delayed, reduced or canceled new investment plans.
The CFO survey tends to be pretty accurate historically, Graham said – more so than similar surveys of chief executive officers.
“The CFOs are making the plans for what's going to happen next month or the month after,” he said. “CEOs try to be optimistic.”
In a survey by The Business Roundtable also released Wednesday, 91 percent of CEOs said they expected sales to stay level or increase over the next six months. The Associated Press contributed.