Uncertain Economy Leads Companies to Curb Expansion Plans, Survey Finds

MENLO PARK, CA -- Market conditions may deter companies from expanding operations but not from rolling out new products. In a new survey of chief financial officers (CFOs), nearly one-third (32 percent) said they're most likely to put corporate expansion plans on hold amid an uncertain economy. Another 23 percent said they would postpone a merger or acquisition. Delaying the launch of a new product or service received just 10 percent of the response.

The survey was developed by RHI Management Resources, North America's largest consulting services firm providing senior-level accounting and finance professionals on a project basis. It was conducted by an independent research firm and includes responses from 1,400 CFOs from a stratified random sample of U.S. companies with more than 20 employees.

CFOs were asked, "Which one of the following initiatives would you most likely put on hold in an uncertain economy?" Their responses:

Company expansion   32%
Merger or acquisition   23%
Technology upgrade   18%
New product or service launch    10%
None   9%
Other/don't know      8%

"In a tight economy, businesses are more focused on balancing the bottom line and maintaining productivity than expanding operations," said Paul McDonald, executive director of RHI Management Resources. "The goal in a downturn is to generate sales, which explains the reluctance to put off a new product or service launch."

McDonald noted that technology is also critical to a company's competitiveness. "Rather than postpone investments in new technology, businesses are carefully weighing overall efficiency against the up-front expense of implementation."

RHI Management Resources has locations in major cities throughout North America, Europe and Australia, and offers online job search services at www.rhimr.com.



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