CFO Survey Finds Increased Optimism on U.S. Economy in the West

Los Angeles, April 29, 2011 - In a biannual survey of Western U.S. Chief Financial Officers (CFOs) and senior comptrollers conducted by Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd, there is growing optimism about the U.S. economy as 38% say it will improve over the next six months (up from 28% six months earlier). However, the survey results also indicate that inflation may be in the offing, with 51% of respondents saying their company intends to raise prices for its goods, up from 30% six months earlier and 22% one year ago.

More than half of the Western CFOs (55%) reported that they were concerned about the price of raw materials (food, metals, etc.), up from just 26% six months ago, and an additional 39% said they were concerned about the price of energy, up from 22% six months ago.

While hiring is still tepid, 31% of Western CFOs intend to increase head count (up from 23% six months earlier), and 56% are optimistic about their own company’s financial prospects over the next six months (up from 48%).

Regarding the Japan disaster, 93% say it will impact the U.S. economy and the majority believes that Japan will not fully recover for at least one year.

Grant Thornton LLP conducted the biannual national survey from March 22 through April 6, 2011, with 318 U.S. CFOs and senior comptrollers participating, of which 39 were from the West Region — Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.

Over the next six months, do you expect the U.S. economy to:
• 48% nationally expect it to improve where as 38% in the West Region expect it to improve.
• 42% nationally expect it to remain the same where as 54% in the West Region expect it to remain the same.
• 10% nationally expect it to get worse where as 8% in California expect it to get worse.
Over the next six months, do you expect your company’s financial prospects to:
• 54% nationally expect it to improve where as 56% in the West Region expect it to improve.
• 37% nationally expect it to remain the same where as 31% in the West Region expect it to remain the same.
• 9% nationally expect it to get worse where as 13% in the West Region expect it to get worse.

Over the next six months, do you expect prices or fees charged by your company to:
• 50% nationally expect it to increase where as 51% in the West Region expect it to increase.
• 44% nationally expect it to remain the same where as 44% in the West Region expect it to remain the same.
• 6% nationally expect it to decrease and 5% in the West Region expect it to decrease.

Over the next six months, do you expect your head count to:
• 39% nationally expect it to increase where as 31% in the West Region expect it to increase.
• 42% nationally expect it to remain the same where as 46% in the West Region expect it to remain the same.
• 19% nationally expect it to decrease where as 23% in the West Region expect it to decrease.

Are you concerned about a double-dip recession?
• 57% nationally responded yes where as 58% in the West Region responded yes.
• 43% nationally responded no where as 42% in the West Region responded no.

How long do you think it will take the Japanese economy to recover fully from the recent earthquake and tsunami?*
• 5% nationally and in the West Region said less than a year.
• 34% nationally said 1-3 years where as 36% in the West Region said 1-3 years.
• 39% nationally said 3-5 years where as 31% in the West Region said 3-5 years.
• 21% nationally said longer than 5 years where as 26% in the West Region said longer than 5 years.
• 3% nationally and in the West Region said they didn’t know.

Do you believe that the U.S. economy will be impacted by the situation in Japan?*
• 11% nationally said has greatly impacted the U.S. economy where 8% in the West Region said it greatly impacted the U.S. economy.
• 83% nationally said it somewhat impacted the U.S. economy where as 85% in the West Region said it somewhat impacted the U.S. economy.
• 6% nationally said it had no impact where as 8% in the West Region said it had no impact.

Is your company making any changes to the average costs per employee in any of these employee benefit and compensation areas?*

Salary Raises:
• National: Increase- 30%, Same- 58%. Decrease-12%
• The West Region: Increase- 21%, Same- 69%, Decrease – 10%

Bonuses:
• National: Increase 19%, Same- 63%, Decrease 19%
• The West Region: Increase-11%, Same-62%, Decrease-27 %

Stock options/ equity-based compensation:
• National: Increase-5%, Same- 81%, Decrease- 14%
• The West Region: Increase-0%, Same-75%, Decrease-5%

401(k) match:
• National: Increase-11%, Same-81%, Decrease-8%
• The West Region: Increase-11%, Same- 82%, Decrease- 8%

Health care benefits:
• National: Increase-21%, Same- 53%, Decrease- 26%
• The West Region: Increase- 21%, Same- 55%, Decrease- 24%

Life insurance benefits:
• National: Increase-5%, Same-88%, Decrease- 7%
• The West Region: Increase- 8%, Same 89%, Decrease-3%

Disability benefits:
• National: Increase-5%, Same -87%, Decrease-8%
• The West Region: Increase- 11%, Same- 81%, Decrease- 8%

About which type(s) of pricing pressure are you most concerned? (Select all that apply.)
• 75% nationally said employee benefits (e.g. health care, pensions) where as 71% in the West Region said employee benefits.
• 47% nationally said raw materials (e.g. food, metals) where as 55% in the West Region said raw materials.
• 45% nationally said energy where as 39% in the West Region said energy.
• 17% nationally said company insurance (not including health care) where as 16% in the West Region said company insurance.
• 19% nationally said other where as 11% in The West Region said other.

* Percentages may not total 100 due to rounding.

About Grant Thornton LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.

In the U.S., visit Grant Thornton LLP at www.GrantThornton.com.

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jim.goyjer@carlterzianpr.com
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Suite 200
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This release was published on openPR.