Elliott also notes a “significant turnaround” in the inventory situation, with CFOs now expecting to increase inventories by 2.8% over the next 12 months, vs. the 1.9% decline in inventories they projected in the third quarter and the 3.08% decrease cited in the second quarter. The 5.9% surge in fourth-quarter GDP was driven largely by a decline in inventory liquidation.

The finance chiefs' outlook on revenues and net earnings also showed considerable improvement. CFOs are projecting revenues will rise 9.62% over the next 12 months, up from the 5.8% gain they were forecasting in the third quarter. And they expect net earnings to skyrocket 22.07%, vs. the 10.9% jump they were forecasting in the third quarter.

Amid the rampant optimism, the finance chiefs surveyed are still hesitant to declare an end to the recession. Just 9.2% now say a recovery will start in the first half of 2010, down from 27.6% who were calling for a first-half recovery back in the third quarter. Almost half (49.2%) expect the recovery to kick off in the second half of this year, and 21.9% say it will start in the first half of 2011.

“It's a little slower recovery than previously expected,” says FEI President Marie Hollein. “While things are looking better, they're still proceeding with caution.”

CFOs have good reason to be cautious, given the 10% unemployment rate and the fact that the federal stimulus program will end in coming months, Elliott says. “There are realistic awarenesses that there are still things that could go wrong.”