The credit markets haven’t moved much so far in 2009, according to the results of a survey released last week by the Association for Financial Professionals. Fifty-nine percent of the 360 chief financial officers and senior financial people polled reported that their companies’ access to short-term credit “had not significantly changed” since the year year, according to the report. Only 14 percent saw an increase in credit availability, while 27 percent saw further tightening by their lenders.

“Despite unprecedented government action, the lack of any significant thaw in short-term credit access is extremely troubling and many companies are reacting by stockpiling cash,” according to a statement from Jim Kaitz, president and CEO of AFP.

Nearly three-fourths of surveyed firms have maintained or increased their cash balances during the first part of 2009, which despite keeping them well-positioned for a recovery has the Catch-22 result of delaying a rebound, said Kaitz. “Overall economic conditions will not improve until organizations can begin using their cash in activities that foster growth."

Overlooking that contradiction, 74 percent of those surveyed believe the worst of the recession has passed and expect credit markets “will start easing by the end of the year.” For now, a vast majority (70 percent) have reduced capital spending; have cut or frozen hiring (69 percent); and either considered or carried out staff cutbacks (59 percent). And 44 percent transferred all or most short-term investments to bank deposits and Treasury securities.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.