Survey of Finance Execs Shows Uptick, but Still Worries

11.08.2011
A survey of U.S. finance executives by CFO services provider Tatum was suggesting a slight upturn in corporate-finance conditions in the days before the nation's debt ceiling was raised, and before the Standard & Poor's downgrade of the U.S. threw the markets into turmoil.

In releasing results compiled as part of its monthly , based on surveying done in late July, Tatum said the small uptick was reflected both in responses about the immediate past, and about what these finance executives see ahead. Still, results reflected some pessimism among finance executives about prospects for both hiring and capital availability.

In an earlier survey by Tatum this year, its researchers noted, results had correctly predicted the nation's anemic second-quarter GDP growth of 1.3%.

The overall Tatum index number improved slightly, to 3.0 from 2.7 a month ago, with slight upturns in both reports of recent past activity and of future outlook. Tatum describes its index as an average of the ratio of its respondents reporting improvement, versus those reporting a worsening in business conditions for the past 30 days and for the next 60 days.

While the uptick in the index number comes after five months of consecutive declines, Tatum noted that, in a range of 3.0 to 4.0, there is "a very high correlation with near zero economic growth." Below 3.0 suggests recession in the Tatum Index, and the Index was in that range throughout the 2008-2009 recession.

Since the recession's end, the Index has been at or above 3.0, except for the months of September 2010 and July 2011.In the latest survey, a majority of respondents, asked about general conditions over the previous 30 days, said they considered the situation to be about the same as in the previous month, although the percentage experiencing improvement was up slightly.