Contact: Jim Gray, Duke-Fuqua, (919) 660-2935 or Chris Allen, FEI, (973) 898-4658

CFO SURVEY: Productivity to soar, driven by computer technology;

However, b-to-b Internet usage stagnant;


Predict market to go up if Bush elected, flat if Gore elected


DURHAM, N.C., October 3, 2000 — A new poll of 199 companies indicates productivity will increase by 4.5% in the coming year. Productivity improvements will be strongest in high-tech industries, with output per employee expected to increase by 9.5%. These numbers are from the latest Financial Executives Institute/Duke University Corporate Outlook Survey, conducted the week of September 18, 2000.

"Improvements in computer technology have helped corporations increase worker productivity," says John Graham, a finance professor at Duke University's Fuqua School of Business and the director of the survey. "62% of executives say that computer technology has improved productivity for their company a lot, and another 35% say computers have improved productivity some."

Increased usage of the Internet has also enhanced productivity. Twenty-two percent of companies say that using the Internet has improved their firm’s productivity a lot over the past five years, and another 49% say it has improved productivity some. However, revenue derived from the Internet has remained flat over the past 18 months. In March 1999, 24% of firms reported Internet sales, representing five percent of total sales. In comparison, 47% percent of firms now report Internet sales – but total sales over the Internet have held steady at five percent. This implies that the firms that have recently initiated e-business are earning only a small amount of revenue from Internet sales. Similarly, in March 1999, one-third of companies purchased supplies or inventory over the Internet, representing 4.5% of total purchases. Currently, two-thirds of firms make purchases over the Internet, but Internet purchases still represent only 4.5% of total purchases. The lack of growth in company purchases over the Internet indicates that b-to-b usage has not increased in the past 18 months.

Stock market returns: Bush vs. Gore

CFOs predict a surge in the Dow Jones Industrial Average to 12,200 by summer 2001 if George W. Bush is elected president. In contrast, if Gore is elected, the market is only expected to increase to only 11,500. (The Dow was 11,311 when this question was asked.)

Overall, the business leaders expect the S&P 500 to return 8.7% over the next 12 months. "This represents a market 'risk premium' of only about 3% over the yield on Treasury bills and notes, which is much lower than the historical risk premium of closer to 7% or 8% over T-bills," notes Graham. Over the next 10 years, the stock market is expected to return about 10.4% annually, according to the survey.

Inflation and Capital Spending

CFOs expect to increase the prices of their companies' products 2.2% during the next year, down from an expected increase of 3.5% predicted in last quarter’s survey. Among the 65% of firms that expect to increase their prices, the average price increase will be 3.3%. Capital spending is expected to increase 7.9% during the next 12 months.

About the Survey

The survey is conducted quarterly by FEI and Duke University’s Fuqua School of Business. Each survey polls a cross-section of CFOs from more than 4,000 U.S. companies. The current survey was conducted during the week of September 17, 2000. Complete survey results are available on the Internet at

About FEI and Fuqua

Financial Executives Institute is the leading advocate for the views of corporate financial management. Its 14,000 members hold policy-making positions as chief financial officers, treasurers and controllers at 8,000 companies in the U.S. and Canada. For more information, visit

The Fuqua School of Business at Duke University was founded in 1970. Fuqua’s mission is to educate thoughtful business leaders worldwide and to promote the advancement of business management through research. For more information, visit