Chief financial officers plan to significantly increase their company’s capital spending in 2016. Technology will be the biggest area of spending.
According to TD Bank’s fifth annual CFO Survey, which polled CFOs and other corporate financial decision makers at middle-market and large corporations, 61 percent expect to increase capital expenditures next year, reflecting a marked and steady climb since 2010, when TD’s inaugural CFO Survey found 39 percent of executives planned to increase spending. That’s based on their belief the economic outlook remains positive despite forecasts of an interest rate increase and uncertainty in government policies heading into an election year.
Participants cited three keys areas of capital spending for 2016:
- Technology – 58 percent,
- Existing facilities – 44 percent and,
- Data security – 41 percent
In spite of speculation that the Federal Reserve may soon raise interest rates for the first time in over a decade, the majority of executives reported this would not alter their plans to make business investments in the year ahead. Nearly three-quarters of executives noted the rate increase would have no impact on their borrowing, and 6 percent said a rate hike would make them more likely to borrow.