GE Capital, Americas released the results from a survey of chief financial officers of 539 mid-market companies in seven distinct industries across the United States in December 2009 and January 2010. The responses of transportation industry CFOs stand out from their peers in other industries in three distinct areas: Their concerns about energy costs, ambivalence about green initiatives, and probable future financing plans.
The CFOs of all industries were asked about their current views and outlook on the U.S. economy, commercial credit and lending conditions, sales, energy costs and other operational issues. Transportation industry CFOs believe that energy costs will have either a significant impact (46 percent) or a moderate impact (40 percent) on their company’s performance. Overall, 17 percent of respondents said that energy costs would have a significant impact.
At another point in the survey, participants were asked the following question: Will any of the items on this list of factors significantly impact your business performance in 2010? When phrased this way, 84 percent of transportation CFOs said that energy costs would be a factor. That’s the same percentage of CFOs in all industries that is concerned about the impact of healthcare costs on its business.
The transportation industry is divided on green initiatives. Respondents were asked to rank – on a 1 to 5 scale, where 1 is not important and 5 is absolutely important – how important green initiatives are within their overall business strategy. Thirty-four percent of transportation CFOs chose the top two boxes (4 or 5), but 37 percent chose 3 and 18 percent chose 2.
The survey also found that cash flow is the top concern among transportation CFOs. When asked to rate the strength of their own industry – using a scale of 1 to 10, where 1 is extremely weak and 10 is very strong – transportation maintains the most negative view with a mean response of 4.24. The mean response for all industries was 5.1.
The transportation industry’s sentiment toward itself is slightly ahead of its sentiment toward the current strength of the overall U.S. economy; the industry’s mean response toward the U.S. economy is 3.82. The majority of the industry’s CFOs believe they will be in a cyclical/limited growth phase over the next 1 to 3 years.