CFO Survey Shows Interest Rate Impact

How are falling interest rates affecting corporate spending? It depends on whom you ask, suggests a new survey developed by RHI Management Resources. Of the 1,400 chief financial officers (CFOs) polled, 48 percent cited interest rates as having no impact on business expenditures, while 50 percent of respondents said prevailing rates are factored into their purchasing decisions. Fourteen percent of those polled noted that interest rates have a significant impact on how they spend their firms' money.

CFOs were asked, "How much of an impact do interest rates have on the purchasing decisions you make for your company?" Their responses:

  • Significant impact 14%
  • Somewhat of an impact 36%
  • No impact 48%
  • Don't know/no answer 2%

"Executives must carefully evaluate whether purchases make good business sense for the company over the long term, particularly with expenditures such as new technology or equipment," said Paul McDonald, executive director of RHI Management Resources. "Immediate business needs notwithstanding, interest rates are a key consideration for many CFOs during this assessment and can also impact other financial decisions including budgeting, forecasting and product pricing."

The survey 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.

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