CFO optimism plunges on recession fears

NEW YORK (Reuters) - Recession fears are weighing heavily on U.S. corporate finance chiefs, pushing optimism down to a fresh three-year low, according to a survey on Wednesday.

The quarterly survey from Financial Executives International (FEI) and Baruch College showed its optimism index sank 6.6 points, as nearly every chief financial officer polled said they were as concerned or more concerned about recession than they were in the previous quarter.

"CFOs have steadily for three years been expressing less confidence about the economy, so they've been seeing something coming," said Michael Cangemi, president of FEI, a trade group for finance chiefs, treasurers and corporate comptrollers.

"I think this credit crisis and the market has really got them spooked."

Of the 361 CFOs polled, 73 percent said they were more concerned about a recession in the United States in the next 12 months.

Economic growth ranked as their companies' top economic worry, followed by concerns about consumer spending, inflation and oil costs.

Weakness in the dollar was also a worry, with nearly 46 percent of CFOs saying the decline would have a negative impact on their business. Twenty-six percent of CFOs said the weaker dollar would have a positive impact on their business.

"It's a two-edged sword depending on where your company lies," Cangemi said. "It helps you if its an exporter and it doesn't if you're not ... If you travel a lot you see the weakening dollar raising your cost to go outside the country and you see it if you're buying products from overseas."

CFOs, however, still largely expected their own companies to outperform the economy this year, according to the survey.

"When they look out at the economy they (CFOs) worry, but ... collectively, if they're all right about their own businesses, which presumably they know better than the economy as a whole, then maybe they are being a little overly pessimistic right now," Cangemi added.

(Editing by Andre Grenon)