Erin Medlyn (Duke University s Fuqua School of Business) (919)

Transcription

1 Brazil CFO Survey: Strong Outlook for Brazil in DUKE UNIVERSITY NEWS and FGV News Duke University Office of News & Communications FOR IMMEDIATE RELEASE: Wednesday, March 15, 2013 CONTACTS: Luana Magalhães (FGV) at / or and Erin Medlyn (Duke University s Fuqua School of Business) (919) erin.medlyn@duke.edu and Kevin Anselmo (Duke) kevin.anselmo@duke.edu CFOs: BRAZIL OUTLOOK BRIGHT FOR Note to editors: For additional comment, see contact information at the end of this release. DURHAM, N.C. - Brazilians CFOs are still confident about the economic perspectives for the economy in 2013, as shown in the Optimism Index, that rose to 63.5 in the quarter, from 60.1 at the previous period. CFOs expected a strong increase on revenues (9.2%) and on profits (10%) for the next 12 months. Employment should rise 3.9%. The main concerns of Brazilians companies are the same: maintaining margins and hiring and keeping qualified employees. The companies plan to invest in workforce training and education to obtain skilled human resources. Overall, the CFOs in Latin America are the most optimists of the world about the economics perspectives for These are some of the findings of the most recent quarterly survey entitled CFO Survey Global Business Outlook, conducted by Duke University, Fundação Getulio Vargas and CFO Magazine with support from BMFBovespa and the Brazilian Institute of Finance Executives (IBEF). The quarterly survey, which concluded March 8, 2013, asked 1143 CFOs around the world, including 204 from Latin America, form which 68 from Brazil, about their firm s expectations and the economy. (See end of release for survey methodology.) The Latin American edition is a part of the Global Business Outlook Survey which has been conducted for 69 consecutive quarters. It spans the U.S., Asia, Europe and Latin America, making it

2 the world s longest running and most comprehensive research on senior finance executives. Presented results are for Brazilian firms unless otherwise noted. SUMMARY OF FINDINGS CFOs in Brazil and Latin America remain optimistic about their respective economies. In Brazil, 49% of the CFOs are more optimists than in the previous quarter only 30% are more pessimistic. This increase is even higher for Latin America: 53% more optimistic and 29% more pessimistic. Brazilian companies maintain its positive outlook for full-time job. In average, the full-time job should increase at 3.9% in the next 12 months (the forecast in the last quarter was 3%). As has been in the previous quarters, the companies reported difficulties hiring employees with the level of qualification required. On average, CFOs predicts an increase of 6% on wages for the next 12 months, virtually the same forecast of the Brazilian Central Bank for inflation, indicating constant real wages. The forecasts for capital investments growth showed a drop from the previous quarter. Fell from 7.2% to 3.6%. The temporary employment should increase in 1.8%. This represents a new trend, since in the past semesters it was expected to decreased. Most of CFOs (59%) believe that the Brazilian Real is quoted at the right price, while 37% believe it is overvalued. Good perspectives for the market for acquisitions: 38% of the companies plan to buy another company or part of it. A significant proportion of which (17%) will happen abroad, which indicates a process of internationalization of Brazilian companies. BRAZILIAN CFOS OPTIMISTIC Economic optimism has been stable in Brazil and become stronger in other Latin America countries. On a scale from 0 to 100, CFOs from Brazil rates their optimism for the Brazilian economy at 63.5, up from 60.1 last quarter. CFOs in Latin America rate the optimism for their countries at 69, from 66 in the previous quarter. Mexico is the most optimistic country (81.7), followed by Peru (79.8), Chile (71.8) and Colombia (68.7). Argentineans CFOs were the least optimistic (33.3). For comparison, the indices in United States and Europe are around 55 and in Asia, at 61. This optimism in Brazil and Latin America is consistent with resumption of economic growth in the area, said Klenio Barbosa, Professor of Economics at FGV and co-director of the Global Business Outlook survey. The result is consistent with the continuous growth in Asia and the second year of growth in US.

3 One important fact to justify this level of optimism is the forecast made by CFOs for the revenue growth (9.2%) and profits (10%). TEMPORARY AND OUTSOURCED LABOR GROWTH CFOs indicate that hires of full-time employees should increase moderately: 3.9% in the next 12 months (slightly higher than predicted last quarter). The big news is the projected increase in the number of temporary and outsourced employees (1.8% and 3%). In the two previous quarters had been forecast one decrease for both types of employees. "The full-time employment has been growing for several quarters. And throughout this period the projected use of temporary and outsourced employment had been declining. In this period the companies have reported difficulty in hiring and retaining skilled workers. Apparently we reached a tipping point, said Gledson Carvalho, Professor of finance at FGV and co-director of the Global Business Outlook survey. "Possibly the increased costs of hiring is causing companies to be more cautious in the recruitment process." Wages must follow inflation and increase by about 6%. Moreover, the tendency is the fall in the growth of spending on advertising and research and development. MAINTENANCE OF MARGINS AND SKILLED WORKERS SHORTAGE CONTINUES BEING THE MAIN CONCERNS: The concern with maintaining margins is increasing among CFOs Brazilians: 74% of CFOs list maintenance margins between their top three concerns (last quarter was 68%). The second main concern is related to attracting and retaining qualified employees. This concern is reported by 51% of CFOs. Last quarter this concern reached 63% of companies. Finally, maintenance of productivity has been the third source of concern being reported by 37% of CFOs. RESULTS SPECIFIC TO THE U.S., ASIA, AND EUROPE Please visit for global results. For additional comment, contact Luana Magalhães (FGV): or luana.magalhaes@insightnet.com.br; - Gledson de Carvalho: or gledson.carvalho@fgv.br; - Klenio Barbosa: or klenio.barbosa@fgv.br;

4 - CFO Magazine s Kate O Sullivan: (x3214) or kateosullivan@cfo.com; or - John Graham: or john.graham@duke.edu. Detailed results, including tabular summaries of the numbers in this release and results from previous surveys, are available at About the survey: The Latin American Business Outlook is a quarterly survey of financial executives in the region conducted by Duke University, Fundação Getulio Vargas and CFO Magazine, and with support from BMFBovespa and IBEF-SP (Instituto Brasileiro Executives of Finance of São Paulo). It is part of the research entitled Global Business Outlook. The survey was completed on March 8, 2013 and had the participation of 1,143 CFOs, including 506 U.S., 256 from Asia, 177 from Europe and 204 in Latin America, these 68 Brazilians. The Global Business Outlook has been conducted 69 consecutive quarters by Duke University and CFO Magazine. Duke, CFO, and Fundação Getulio Vargas (FGV) jointly conduct the Latin American Business Outlook. This is the third quarter the survey has included Latin America. The survey of European CFOs is conducted jointly with Tilburg University in the Netherlands. The results presented are for Brazilian companies, unless otherwise indicated. A wide range of companies (public and private, small and large, many industries, etc.) are polled, with the distribution of responding firm characteristics presented in online tables. Among the industries represented in the survey are retail/wholesale, mining/construction, manufacturing, transportation/energy, communications/media, technology, service/consulting and banking/finance/insurance. The average growth rates are weighted by revenues or number of employees; for example, one $5 billion company affects an average as much as ten $500-million firms. Revenue-weighted mean growth rates are provided for earnings, revenues, capital spending, technology spending and prices of products. Employee-weighted mean growth rates are used for health-care costs, productivity, number of employees and outsourced employment. The earnings, dividends, share repurchases and cash on balance sheet are for public companies only. Unless noted, all other numbers are for all companies, including private companies. Duke s Fuqua School of Business was founded in Fuqua s mission is to educate business leaders worldwide and to promote the advancement of business management through research. For more information, visit Fundação Getulio Vargas (FGV) was founded in FGV is an educational center of quality and excellence that dedicates its forces to the intellectual development in Brazil. Its mission is to push the boundaries of knowledge in social sciences and related fields through the production and dissemination of ideas, data and information, as well as their preservation and systematic organization; to contribute to the country s social and economic development, improving the nation s ethical standards, promoting a responsible and shared government, and inserting the country into the international stage. For more information, visit CFO Publishing LLC, a portfolio company of Seguin Partners, is a business-tobusiness media brand focused on the information needs of senior finance executives. The business consists of CFO magazine, CFO.com, CFO Research

5 Services, CFO Metrix and CFO Conferences. CFO has long-standing relationships with more than a half million financial executives.