Grant Thornton CFO Survey Finds California's Weak Job Market To Continue 71% California CFOs say cutting corporate and individual taxes would create jobs

LOS ANGELES, CA, October 30, 2010

In a survey of California CFOs and senior comptrollers conducted by Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd, only 28% plan to increase hiring in the next six months, while 20% plan to decrease hiring.

More than three-quarters of California CFOs (77%) believe that the U.S. economy will not recover until the second half of 2011 or later, and more than half (60%) are concerned with a double-dip recession. The national findings are in line with the California findings, see results below.

"These findings are consistent with what we have been hearing from our dynamic-organization clients throughout California," said Grant Thornton LLP Southern California Managing Partner Joel Anik. "Indecision stemming from a weak economy and the unknown impact of governmental tax policy and new regulation on California businesses and individuals is causing paralysis, particularly as it relates to major business decisions, including expansion, expenditures and hiring."

The key findings include:

• Much less optimism about U.S. economy over next six months
26% of California CFOs expect improvement, compared to 30% nationally.

• More optimism for their own businesses than U.S. economy
49% of California CFOs expect improvement, compared to 46% nationally.

• Inflation creeping in
While 60% of California CFOs expect no increase in prices over next six months, 28% expect their prices to increase.

• No economic recovery until second half of 2011 at the earliest
49% of California CFOs do not expect economic recovery until after 2011, while another 28% say recovery won't happen until the second half of 2011.

Over the next six months, do you expect the U.S. economy to:*

National
Improve 30%
Remain the same 56%
Get worse 14%

California
Improve 26%
Remain the same 57%
Get worse 17%

Over the next six months, do you expect your company's financial prospects to:*

National
Improve 46%
Remain the same 45%
Get worse 9%

California
Improve 49%
Remain the same 38%
Get worse 13%

Over the next six months, do you expect prices or fees charged by your company to:*

National
Increase 31%
Remain the same 62%
Decrease 7%

California
Increase 28%
Remain the same 60%
Decrease 13%

Over the next six months, do you expect your headcount to:*

National
Increase 29%
Remain the same 51%
Decrease 21%

California
Increase 28%
Remain the same 52%
Decrease 20%

Are you concerned about a double-dip recession?*

National
Yes - 59%
No - 41%

California
Yes - 60%
No - 40%

When do you believe the U.S. economy will recover?*

National
Second half of 2010 - 3%
First half of 2011 - 18%
Second half of 2011 - 37%
Later than 2011 - 42%

California
Second half of 2010 - 4%
First half of 2011 - 19%
Second half of 2011 - 28%
Later than 2011 - 49%

The best way to create jobs is:*

National
Cut corporate tax rate - 35%
Cut personal income tax rates - 29%
Government stimulus programs - 9%
R&D credits - 6%
Tax credit for new hires - 22%

California
Cut corporate tax rate - 43%
Cut personal income tax rates - 28%
Government stimulus programs - 11%
R&D credits - 9%
Tax credit for new hires -11%

* Percentages may not total 100 due to rounding.

About the survey
Grant Thornton LLP conducted the biannual national survey from Oct. 5 through Oct. 15, 2010, with 516 U.S. CFOs and senior comptrollers participating. In California, 47 private and public companies participated in the survey.

About Grant Thornton LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.

In the U.S., visit Grant Thornton LLP at http://www.GrantThornton.com.