Alex Hopkins The Washington Times - October 7, 2013, 12:09PM
One week into the government shutdown, financial executives worry that the U.S. could see a substantial loss in investments if Congress and the Obama administration fail to raise the debt ceiling, according to a report released Monday by the Association for Financial Professionals.
The AFP surveyed 964 financial executives in the finance and corporate treasury departments on Oct. 3 and Oct. 4.
In the short term, respondents believe that capital expenditures and hiring will be dramatically reduced if no political compromise is brokered. One-sixth of respondents who currently hold a U.S. Treasury security believe that they will have to shift their investments.
“Companies are issuing a warning: A default will lead to lower capital investment and job losses, and slowing business activity amid an already-tepid recovery,” said Jim Kaitz, AFP’s president and CEO. “Companies are already expecting lower demand for their goods and services as a result of the budget and debt ceiling impasse.”
In the long term, 40 percent of respondents reported making cuts in domestic growth-oriented investments because of the constant political battles waged over debt limits and budgets. While 41 percent of companies expect a negative impact on their financial offerings, 35 percent anticipate a decrease in the use of other companies’ goods and services.