Technology spending is expected to rise at three-quarters of the surveyed companies, and almost half (48 percent) will increase research and development spending, while 47 percent expect no change. Technology spending will rise an average eight percent, and research and development an average five percent.

Corporate spending plans appear a reflection of the increased optimism of the 297 CFOs participating in the survey conducted by Financial Executives international (FEI) and Baruch College's Zicklin School of Business. The CFO economic optimism index, which had been dropping since June 2004, jumped 4.34 points to 69.69. CFO optimism about their own company reached 77.37, the highest it's been since June 2004. The survey is conducted quarterly.

"These survey results translate to very good news for the economy," said Burton Rothberg, assistant professor of accounting at Baruch College. "Based on our CFOs' spending plans and optimism, we think the economy should be in stronger shape than generally expected. Further, a significant number of CFOs feel the market is underestimating the future rise in interest rates, and in the past, they have usually been right. Since rates usually rise into a strong economy, this is another indication of their optimism."

Added Colleen Cunningham, FEI's President and CEO, "The anticipated jump in corporate spending could prove to be a valuable boost to the economy in 2006. Suppliers of all types, in IT, consulting and other areas, have reason to feel pretty confident."

Healthcare. CFOs expect their companies' health care costs to increase by seven percent. While still significantly higher than the rate of inflation, the expected increase is actually lower than CFOs have anticipated for more than two years.

Pensions. In terms of pension fund investment returns, CFOs say they are expecting 6.99, 8.00 and 8.31 percent annually over one, five and ten years. For 2006, they expect to allocate 51 percent of their portfolio to domestic equities, 32 percent to domestic fixed income and 10 percent to international. Cash, hedge funds, real estate, and "other" make up the remaining seven percent.

GAAP. Regarding GAAP (Generally Accepted Accounting Principles) for private companies, two-thirds of CFOs feel there should be no difference between public company and private company accounting principles. As one CFO stated, "Good GAAP is good GAAP." However, the dissenting minority (30 percent) have strong views: "For private companies, current GAAP rules can result in financial statements that do not accurately reflect the true performance of the business." And, "Some pronouncements are overly expensive to achieve with little benefit to a private company."

Sarbanes-Oxley. Regarding Sarbanes-Oxley, 82 percent of CFOs think it's important for the Securities and Exchange Commission and Public Company Accounting Oversight Board to provide further guidance about Sarbanes-Oxley for more effectiveness and cost-efficiency.

Full survey results will be available December 12 at www.cfosurveys.com.

This quarter, the CFO Outlook Survey interviewed 297 corporate CFOs electronically November 29 - December 2. CFOs from both public and private companies and from a broad range of industries, revenues and geographic areas, including some off-shore companies, are represented. Survey respondents are members of Financial Executives International.