The economic downturn and weakness of the U.S. dollar continue to impact businesses in the U.S. While 34 percent of CFOs reported that the weakness of the U.S. dollar has led to increased international sales, 51 percent have seen an increase in the costs of commodities/raw materials, and 33 percent say their quarterly earnings have decreased.

When asked what their view was of a potential recession in the U.S. in the current year, 41 percent of the CFOs surveyed said they believe the U.S. is currently in a recession, while an additional 32 percent believe the U.S. will likely go into a recession within the next 6 months. Only 18 percent said they did not believe the U.S. would go into a recession at all in 2008.

"What we are hearing from CFOs is, recession or not, they are taking defensive measures to combat the economic slowdown." said John Elliott, Dean of the Zicklin School of Business at Baruch College. "This quarter's survey revealed that almost half of the CFOs are in agreement with U.S. economists and believe we are currently in a recession."

The CFO Optimism Index for the U.S. economy was 54.29 for this quarter, dropping even further past last quarter's three-year low of 56.26. Thirty- four percent of the CFOs surveyed said that, during the first quarter of this year, they had delayed the implementation of business-related spending due to recession concerns.

CFOs' outlook toward their own companies decreased again this quarter, as the Optimism Index of the CFOs' own companies sank to 68.12, falling 2.1 points lower than last quarter, which itself was a three-year low.

"This quarter's data points to a continued decline in optimism among CFOs," said Michael P. Cangemi, FEI President and CEO. "With the permeation of pessimism, the survey revealed two-thirds of companies identifying some type of cutbacks, specifically in the areas of layoffs and reduced hiring. It is now more important than ever for CFOs to identify efficiencies and conduct smart business."

In response to the current economic downturn, 46 percent of the CFOs surveyed identified hiring as an area for cutbacks. Nearly a quarter (24 percent) selected conducting layoffs when asked the same question. Interestingly, a similar number -- 23 percent -- of CFOs surveyed said they had actually increased their marketing/advertising budget as a response to the economic downturn.

CFOs surveyed support changing the ratings agency process. Thirty-five percent of CFOs said ratings agencies should create a new rating scale. Nineteen percent of those surveyed recommended the addition of warning labels to the agencies' ratings, with close to half of respondents (46 percent) stating that they would have more confidence in the ratings if the agencies changed their process to include these warnings and provide better distinctions for structured finance ratings.

When asked about the economic stimulus bill, only 12 percent of CFOs said they would increase equipment purchases to take advantage of the recently- passed bill which allows business accelerated depreciation tax breaks on equipment purchased and placed into service in 2008.

Full survey results are available at http://www.cfosurveys.com