NW -- the 2nd from last para in this article caught my eye.....
Mar 28, 2001 (Winston-Salem Journal - Knight Ridder/Tribune Business News via
COMTEX) -- Chief financial officers expect corporate profits to rise an average
10 percent at their companies over the next 12 months, but they say that levels
of capital expenditure and employment over the same period are likely to be
flat.
The one major exception to corporate attempts to cut back on expenses will be in
technology spending, the survey added.
In a quarterly survey released yesterday by Duke University's Fuqua School of
Business and Financial Executives International, chief financial officers at 153
big companies, half of which are manufacturers, predicted 1.6 percent growth in
the country's gross domestic product in 2001, down a third from the 2.4 percent
they expected in a survey three months ago.
Despite recent steep declines in the stock market, however, those surveyed said
they expect the S&P 500 to gain 5 percent over the next 12 months.
Thirty-one percent of the companies plan to cut jobs this year, with another 20
percent holding employment steady. This is the first time in the five-year
history of the survey that the majority of companies polled do not have plans to
increase employment. Last quarter, only 13 percent of firms said that they would
reduce employment, with 12 percent holding levels constant.
"CFOs in our survey are foreseeing a growth recession rather than an economic
recession," said John Graham, a finance professor at the Fuqua School of
Business and the director of the survey.
"They're saying inflation will stay in check due to restraints in pricing, and
higher productivity. Also, employees shouldn't expect much of a raise this
coming year and getting a new job will not be easy. The good news is that CFOs
predict that corporate earnings and the stock market will be in positive
territory over the 12 months."
Forty-one percent of the companies surveyed plan to cut overtime this year, with
another 38 percent holding the line and the remaining 21 percent increasing
overtime.
Even with a slowing economy, companies will continue to pump money into
technology, the survey showed. Two-thirds of those surveyed said they plan to
increase technology spending in the next 12 months, relative to last year.
"Technology spending is defying gravity," Graham said. "Despite companies'
almost across-the-board attempt to control expenses, technology is not an area
where they're cutting back."
By Jane Seccombe
To see more of the Winston-Salem Journal, or to subscribe to the newspaper, go
o journalnow.com
(c) 2001, Winston-Salem Journal. Distributed by Knight Ridder/Tribune Business
ews.
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