Over Half of U.S. Finance Pros Say Tax Hikes Necessary Part of Deficit Agreement

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Association for Financial Professionals

Dec 08, 2011, 09:15 ET

2012 AFP Business Outlook Survey points to moderate job gains, need to resolve political deadlock in Washington to spur future growth

WASHINGTON, Dec. 8, 2011 /PRNewswire-USNewswire/ -- Finance pros overwhelmingly believe that clear action must be taken on deficit reduction to accelerate economic growth in 2012, and more than half think that tax increases should not be taken off the table to achieve a deficit reduction agreement, according to a survey by the Association for Financial Professionals (AFP).

The 2012 AFP Business Outlook Survey, released today, found that financial professionals believe the U.S. economy will continue to strengthen modestly in 2012, with a median expected growth rate of gross domestic product (GDP) of 1.9 percent. Nevertheless, a full two-thirds reject the need for additional fiscal stimulus (QE3).

While the largest percentage of financial professionals since December 2006 is anticipating that their organizations will add staff to their payrolls in 2012, they are expecting a relatively modest net gain in payrolls of only 1.1 million for the entire U.S. economy.

The 2012 AFP Business Outlook Survey was underwritten by SunTrust.

Financial professionals continue to point to uneven consumer demand, business investment and demand for U.S. goods and services overseas as important factors affecting economic growth and job creation in 2012. They also believe these key factors will influence business conditions in 2012:

Managing health care costs (76 percent)
Federal budget deficit (71 percent)
Uncertainty surrounding tax policy (71 percent)
Sovereign debt crisis in Europe (71 percent)
Weak housing demand (70 percent)
Success of efforts to reduce long-term budget deficits (70 percent).

"CFOs and treasurers are sending a clear message: Enough!" said Jim Kaitz, AFP's president and CEO. "These are practical people. They recognize that the political theater must stop in order to achieve a resolution of the debt crisis."

Internationally, financial professionals also are concerned about the ongoing sovereign debt crisis in Europe. Just over half of financial professionals indicate that their organization has been affected financially by the sovereign debt crisis in Europe: 35 percent of organizations experienced a detrimental impact, 18 percent a beneficial impact. Nearly half of those surveyed expect dissolution of the euro sometime within the next three years.

Financial professionals are responsible for ensuring that their companies have enough cash on hand to fund operations, so they are uniquely qualified to observe business conditions and make assumptions about how those conditions may change over the short and immediate term. Based on their assumptions, they must make critical business decisions, including those concerning corporate borrowing and business investments.

ABOUT THE SURVEY
From Nov. 29 through Dec. 7, the AFP surveyed U.S. financial professionals about current and expected business conditions, the seventh year it has done so. The survey generated 741 responses from corporate practitioners holding a variety of positions, including CFO, vice president of finance, treasurer and assistant treasurer, employed across a wide range of industries. The typical respondent is employed by an organization with annual revenues of $1.5 billion. Forty-eight percent of respondents work for a publicly traded organization. Survey results produce a margin of error of +/- 3.4 percent. View the full report on afponline.org/outlook

ABOUT AFP®
The Association for Financial Professionals (AFP), headquartered outside Washington, D.C., serves a network of more than 16,000, members with news, economic research and data, treasury certification programs, networking events, financial analytical tools, training, and public policy representation to legislators and regulators. AFP is the daily resource for the finance profession. AFP's global reach extends to over 150,000 treasury and financial professionals worldwide, including AFP of Canada; London-based gtnews, an on-line resource for the treasury and finance community; and bobsguide, a financial IT solutions network.

SOURCE Association for Financial Professionals