CFO Survey Measures Impact Of Terrorist Attacks

Compiled ByTraci Purdum More than one-half of company CFOs (57%) expect September's terrorist attacks to have a negative impact on their company's earnings over the coming year, while 6% predict a positive impact. Despite the grim outlook, CFOs still expect moderate corporate earnings growth of 8.4% on average during the next 12 months. These are the findings of an e-mail survey conducted Oct. 1-4 by Morristown, N.J.-based Financial Executives International (FEI) and Duke University's Fuqua School of Business, Durham, N.C. The study, which includes responses from 669 CFOs at U.S. companies, provided several other economic forecasts: Economic Rebound

CFOs predict U.S. economic growth will be negative during the last two quarters of 2001.

They also say that U.S. GDP will shrink by 0.25% during the third quarter of 2001 and by 0.34% during the fourth quarter. Larger firms (sales of at least $1 billion) were less optimistic. They predict U.S. GDP will shrink by 0.38% during the third quarter of 2001 and by 0.73% in the fourth quarter.

88% of CFOs expect an economic rebound in 2002: 17% see it in the first half and 71% in the second half.

12% expect the recovery to come in 2003. Employee Productivity and Capital Spending Effects

71% of the CFOs say their company plans no changes in capital spending as a result of the terrorist attacks.

26% are postponing planned capital spending.

3% plan to accelerate capital spending.

51% report worker productivity has declined since Sept. 11. High-tech industries are the hardest hit, with 66% noting a decrease in productivity.

Less than 2% have reported an increase in worker productivity.