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Striking the Right Balance: Finance Executives Combine Growing Optimism With Continued Financial Discipline71% of Finance Executives See Economic Expansion in the Next 12 Months, According to Global American Express/CFO Research Survey

Executives Temper Pursuit of Growth With Focus on Profitability and Rigorous Oversight of Discretionary Spending
NEW YORK,  May 11, 2010 -- 

Senior finance executives from around the world report growing optimism about economic recovery but are proceeding with caution, investing in categories that will boost growth such as sales and product development while selectively increasing discretionary spending in areas like marketing and technology. At the same time, companies continue to closely manage the bottom line and maintain the strong financial discipline that was prompted by the recession.

These findings were released today in the third annual American Express/CFO Research Global Business & Spending Monitor, a survey of 479 senior finance executives from the United States, Europe, Canada, Mexico, Asia, and Australia.

"We're seeing a significant shift to a more positive outlook among finance executives as companies have moved from simply surviving the present to investing in growth for the future," said Gunther Bright, Senior Vice President, Global Client Group at American Express. "At the same time, the experience of the recession set the stage for a newfound and long-term focus on financial discipline and management rigor."

Optimism Propels Renewed Focus on Growth

Executives worldwide report a more positive economic outlook, indicating that a sustained recovery is taking hold. Nearly three-quarters of all respondents (71%) anticipate economic expansion for their countries over the next 12 months, while only 10% expect contraction. This is the highest percentage of respondents indicating that they expect economic expansion in their countries in the three years the American Express/CFO Research study has been fielded. A small majority (56%) said they expected expansion in 2008 and only 18% in 2009.

The brightest outlook for economic recovery comes from Asia -- 87% of executives from Hong Kong, 82% from Singapore, and 78% from India expect growth in the year ahead. Executives in the large industrialized countries have a more measured perspective; 71% of executives in the United Kingdom, 66% in Germany, and 64% in the United States say they anticipate growth in the next 12 months.

Eight out of ten respondents have seen or expect to see a sustained increase in demand for their companies' products and/or services in 2010. Twenty percent of respondents say their companies have already experienced an increase in demand and 47% expect an increase in the second or third quarters of this year.

As the economic outlook brightens, a majority of respondents (67%) say their companies plan to maintain or increase capital spending compared to last year. Nearly two-thirds plan to increase headcount in the next 12 months.

Seeking Efficiency, Maintaining Discipline

As the world economy recovers, finance executives report a continued focus on financial discipline and protecting the bottom line, even as their companies look to capitalize on increasing demand. A large majority of respondents (85%) expect that over the long term their companies will focus closely on cost control and 80% expect their companies will maintain a long-term focus on their core operations. At the same time, survey results suggest that companies will take relatively conservative risk postures: only 38% of respondents agree that their companies will tolerate high risks in pursuit of high returns in the long term.

When asked to look ahead over the next two years, most executives expect their companies' recession-driven management rigor to remain in place in critical finance areas:  

  • Cash and working capital management discipline - 79%
  • Focus on profitability - 72%
  • Balance sheet scrutiny - 70%
  • Administrative discipline - 69%
  • Project and investment ROI requirements - 69%

To help maintain this discipline, executives plan to invest in process improvements -- 44% of respondents say they will invest more to improve production by streamlining manufacturing or upgrading technology systems, and 42% will invest more to improve administrative processes such as finance, accounts payable, and procurement.

Highlighting the balancing act that finance executives face, one survey respondent noted his company would have a "much tighter focus on working capital management, expense control and building strategies to drive growth in down markets." Another respondent remarked that "the recession has caused my company to look at processes differently with the goal of improving efficiency."

Connection Between Increased Spending and Growth a Must

While financial discipline remains a major focus for finance executives, companies are loosening their purse strings and investing in areas that will help increase revenues.

  • 49% plan to increase investment in the development of new products and services.
  • 46% aim to expand through increased sales and marketing activities.
  • 31% expect to increase investment in M&A activity to drive growth.

The majority of finance executives plan to maintain current levels of discretionary spending. However, some are planning increases in areas that will support growth and productivity. Key categories where companies plan to devote more resources in the next 12 months include:

  • Advertising, marketing and PR (29%)
  • Labor (28%)
  • Enterprise-level IT systems (28%)
  • Computer hardware (24%)

Business travel spending is also beginning to stabilize after experiencing a dramatic slowdown during the recession. In addition, some spending increases are planned in areas of travel that are closely linked to revenue growth.

  • Overall, a majority of executives (57%) plan to maintain or increase business travel spending compared to last year, with 26% planning to increase spending and 31% planning to maintain spending.
  • More than a quarter of respondents (27%) report plans to loosen policies for travel to meet with new clients or for business development.
  • In a further sign that spending restrictions are lifting, just 34% of respondents plan to restrict travel for staff meetings or internal business, compared to 81% in 2009. Only 35% say they plan to restrict travel to conferences and events, compared to 79% in 2009.

"Companies enacted strict new spending policies to protect the bottom line during the recession and finance executives fully expect to enforce these policies for the foreseeable future," said Bright. "Yet these same policies are helping companies take a more focused, thoughtful approach by spending where the impact is clearly connected to growth and profitability."

About the Survey
CFO Research Services surveyed 479 senior finance executives at large global companies across a wide range of industries in the United States, Canada, Mexico, Europe, Asia, and Australia. Company revenues ranged from $500 million to more than $20 billion. The research program, which included an online survey and interviews with senior finance executives, was completed in April 2010.

About American Express Global Commercial Card
Through its Global Commercial Card group, American Express provides the Corporate Card, Corporate Purchasing Solutions, and other expense management services to mid-sized companies and large corporations worldwide. In the U.S., it is the leading issuer of commercial cards, serving more than 60% of the Fortune 500, as well as tens of thousands of mid-sized companies. American Express issues local-currency commercial cards in 40 countries, and International Dollar Corporate Cards in an additional 100 countries. For more information, visit

About American Express
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at and connect with us on, and

About CFO Research Services
CFO Research Services is the sponsored research group within CFO Publishing LLC., which publishes CFO magazine.