CHERRY HILL, N.J., June 26, 2019 /PRNewswire/ -- When it comes
to preparing for the future, U.S. businesses are acting with
caution. Although 83 percent of respondents have an overall
positive outlook on the future of the economy, more than half (58
percent) are preparing for an economic downturn, according to a
newly released Corporate Finance Survey of 300 financial
decision-makers conducted by TD Bank, America's Most Convenient
Bank®.
The survey examined CFOs, treasurers and other financial
professionals' perspectives on the economy, business environment,
geopolitical trends and growth plans to better understand
challenges and opportunities in the market.
The top actions respondents are taking to prepare for a downturn
are:
- Developing investment strategies (49 percent),
- Cutting back expenses (39 percent)
- Working on reducing debt levels (34 percent)
- Monitoring cash flow (34 percent)
Among those preparing for a downturn, those who are optimistic
about the U.S. economy in the long term are more likely to develop
an investment strategy, with 58 percent preparing to invest
compared to 36 percent of pessimistic finance professionals.
"CFOs, treasurers and financial decision-makers should monitor
economic uncertainty," said Stephen
Foley, Head of Corporate Banking at TD Bank. "With headwinds
on the horizon in the form of changing tariffs and trade policies
and potential inflationary pressures, finance professionals should
act now and work with a financial partner to determine viable debt
and cash flow plans."
Tariffs and Trade Policies Will Impact Business and Financial
Decision Making
Executives feel positive about the health of their own business.
Ninety-four percent report they are optimistic about the future and
consider the health of their business "excellent" or "good".
Despite their confident outlook, finance professionals acknowledge
that geopolitical factors will impact their business this year.
The top factors that will impact their financial decision-making
are:
- Tariffs and trade policies (35 percent)
- Interest rates (34 percent)
- Consumer confidence (34 percent).
Finance executives acknowledge the challenges of tariffs and
trade policies more than non-executives: 42 percent believe it will
impact their financial decision-making this year compared with 22
percent of non-finance executives.
The Business Community is Focused on Growth and
Innovation
When assessing their business priorities for the next year,
finance professionals are focused on growth and innovation.
According to the survey, the top two business priorities next year
are investment in technology and innovation (45 percent) and
expansion into new markets (44 percent). More specifically, finance
professionals report their business plans this year include
technological upgrades (39 percent), launching new products (39
percent) and leveraging disruptive technology (35 percent).
For many businesses, growth plans and innovation will create
internal challenges and put pressure on finances. Thirty-nine
percent consider the ability to achieve growth as a major internal
challenge, and this number rises (48 percent) among larger
corporations (businesses with revenues exceeding $500 million).
Private companies are challenged by technology more often than
public companies, with 43 percent citing technology challenges
pressured finances compared with 28 percent of public
companies.
"Among finance professionals the mindset is growth and
optimism," said Foley. "As they determine their strategies to
achieve growth in a strong economy, they'll still need to allocate
capital to invest back into their business. Financial
decision-makers now find themselves contending with a competitive
business environment where a consistent model for achieving growth
is paramount."
Funding for Growth Plans
Finance professionals currently utilize equity financing (23
percent) and retained earnings (23 percent) as their primary
sources for capital spend. Supply chain financing (39 percent) and
accounts receivable securitization (37 percent) were the top picks
for supplemental funding sources.
"Securitization and supply chain financing are a great way for
companies to maximize working capital. While the economy is strong,
it's the perfect time to evaluate your bank loans and speak with
your financial partner who can bring deep industry expertise and
product capabilities that support you through every business
cycle," said Foley.
Finance professionals want a strong relationship with their
financial partner. Over one-third of respondents consider a "good
relationship" most important when selecting a financial partner (37
percent). Respondents also cite stability of the partner (30
percent), deep industry knowledge (29 percent) and availability of
capital (28 percent) as important factors when selecting a
financial partner.
A whitepaper, "Guarded Optimism Prevails as Executives Chart the
Future," providing more details and analysis on the findings is
available here.
Survey Methodology:
Research company Maru/Matchbox
conducted the survey among a nationally representative sample of
executive financial decision makers. The online fieldwork occurred
between May 1st and
May 8th, 2019. In total,
300 completes were gathered in the U.S. Margin of Error on a random
sample of this size is +/- 5.66% percent.
About TD Bank, America's Most Convenient
Bank®
TD Bank, America's Most Convenient Bank, is one of the 10
largest banks in the U.S., providing more than 9 million customers
with a full range of retail, small business and commercial banking
products and services at more than 1,200 convenient locations
throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas
and Florida. In addition, TD Bank
and its subsidiaries offer customized private banking and wealth
management services through TD Wealth®, and vehicle
financing and dealer commercial services through TD Auto Finance.
TD Bank is headquartered in Cherry Hill,
N.J. To learn more, visit www.td.com/us. Find TD Bank
on Facebook at www.facebook.com/TDBank and on Twitter at
www.twitter.com/TDBank_US.
TD Bank, America's Most Convenient Bank, is a member of TD Bank
Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services
company in North America. The
Toronto-Dominion Bank trades on the New
York and Toronto stock
exchanges under the ticker symbol "TD". To learn more, visit
www.td.com/us.
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SOURCE TD Bank