Many U.S. CEOs Say Weak Dollar Hurts Business
NEW YORK (Reuters) - Four out of 10 U.S. chief executives believe the weak dollar has had a negative impact on business, according to a survey released on Wednesday.
The survey of 250 chief executives by accounting firm Grant Thornton LLP showed that 39 percent of executives felt the weaker dollar had increased costs related to buying foreign products and services.
"More companies operate globally today than ever before, so the weaker dollar impacts companies in different ways," said Ed Nusbaum, chief executive of Grant Thornton. "But the survey really confirms that more U.S. companies are importing today than exporting."
The 42 percent of chief executives who felt the dollar had a negative impact on business was nearly twice the 24 percent of CEOs who felt the weaker dollar had a positive effect, according to the survey.
Eighteen percent of the CEOs polled said the weak U.S. dollar has not affected their businesses and just eight percent said the weaker dollar had a very positive impact. Sixteen percent of those polled said it had a somewhat positive impact.
The New York Board of Trade's U.S. dollar index .DXY against a basket of six major currencies has declined around 40 percent since peaking in July 2001.
While a weaker dollar is sometimes seen as a boon to exports because it makes U.S. goods cheaper abroad, Nusbaum said the survey revealed U.S. executives do not feel that way right now.
"If you go back maybe 10 years, when more manufacturing was done in the U.S., then a weaker dollar could have been more effective because it would have allowed us to export more," Nusbaum said.
"But it is more difficult now to the extent you are importing and of course many companies have moved their manufacturing operations overseas."
But the executives did largely expect the dollar to recover. Fifteen percent felt the U.S. dollar would strengthen in the next year and 44 percent felt it would strengthen one to two years from now.
Sixty-four percent of the CEOs surveyed felt the U.S. dollar would be most strengthened by reducing the federal budget deficit.
(Editing by Andre Grenon)
© Thomson Reuters 2008 All rights reserved