Despite strong employment numbers and a tight job market, business leaders in the US continued their reluctance to deploy cash and short-term investments in the second quarter.
Similar to last quarter, US companies continued to build cash and short-term investment holdings, according to the AFP Corporate Cash Indicators (CCI), a quarterly survey of senior corporate treasury and finance executives conducted by the Association for Financial Professionals.
AFP said it collected 168 responses from senior treasury and finance professionals this quarter.
The latest CCI’s quarter-over-quarter index reading increased 5 points to +8, signaling that more organizations were accumulating cash reserves in the second quarter, said AFP.
The year-over year indicator decreased two points from +13 to +11, the organization added.
A greater share of respondents anticipate that their organizations will accumulate cash throughout the summer; the forward-looking indicator measuring expectations for changes in cash holdings during the third quarter of 2019 increased two points from a reading of +10 to +12, AFP observed.
In addition, in the second quarter of 2019, organizations’ cash behavior aligned with their expectations entering the quarter.
Meanwhile, the indicator for short-term investment aggressiveness decreased two points, moving from -1 to -3, signaling a continued conservative posture with cash and short-term investments, AFP noted.
“The threats of a trade war with China, escalating immigration issues at the US border and a looming Brexit are contributing to the unease of treasury and finance professionals,” said Jim Kaitz, president and CEO of AFP.