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Duke University Finance Professor John Graham breaks down results of a CFO survey regarding their economic outlook.
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America's chief financial officers see more hiring and spending ahead for their companies but the threat of -- recession still looms large.
This according to the latest quarterly CC FO survey conducted by duke university and CFO magazine joining me -- more.
All the results and a Fox Business exclusive John Graham director of the survey a professor of finance.
At Duke University.
John let me ask you then -- how how do you conduct this survey how many CFOs do you -- you deal interview.
And are they all from all around the world.
Yes this is a global survey so this quarter we had 550.
Responses from the US.
In about another 500 responses from Europe and Asia combined.
We survey small medium and large companies public and private.
-- we average across what we hear from the CFOs about their own companies to get a good sense of where the economy in any given region is having.
OK so while we're at a before we get to the total numbers.
Did you find it thinks the sit bigger -- interest -- region by region.
Well probably the most interesting thing is the US in contrast to Europe and Asia.
There's an improvement in the outlook in the United States and we're of course Europe isn't it is in deep trouble.
And Asia is better off than the US but actually coming down and softening a bit.
LIN it's a CIOs still see a significant chance of recession coming our way in 2012 don't -- to CFOs and -- They do -- so again while the US outlook is up we can go into detail with that if you'd like.
They still assign you -- see if those about a 31%.
Chance.
-- -- in a recession in the next six months of the United States will part of that sue I was looking reading further on 46% of these CFOs.
Really don't have -- a significant plan in place to deal with that recession if it comes about are you surprised that that number and why do you think that it's.
Well let's break -- down just a little bit so we there's about a 30% chance of recession.
Which means some companies think there's maybe a ten or 20% chance of recession in others think fifty or 60%.
If you look across firms you find that the firms with a high probability of recession in their judgment they have a contingency plan in place.
Whereas the companies that don't think -- recession is likely are less likely to have a contingency plan in place.
Now if there's a surprise recession in those people who don't think it's coming they could get caught off guard that's true.
But I'd expect as the probability recession goes up if that -- to happen there'd be more contingency plans in place.
What about hiring -- what -- the CFOs tell you about how much how many resources -- -- to put toward bringing in new people.
-- hiring is is some good news in the US US firms tell us that domestic full time employment.
Should go up by about one point 5%.
If you do the math that means unemployment rate coming down to maybe 8% by the end of 2012.
It's still high by historic standards but still heading in the correct direction.
And finally John didn't -- talk about historic -- standards for -- survey.
The long run average is about sixty in terms of the optimism in the US CFOs how close are we to getting back up there kind of pre recession.
Levels.
Rates in the depths of the recession we are down about forty last Courtney we were about 49.
This quarter were back up to 53 out of 100.
As you said that's still below the -- an average of sixty.
Heading in the right direction but.
But second carried away here we still have.
You -- -- to slow growth mode the optimism is not back where we'd like to see that in the long run my thanks for reporting on your findings John could say yeah.
A pleasure.
