US corporates say they plan to build their cash reserves rather than deploy cash, according to the latest quarterly survey of corporate treasury and finance executives, conducted by the Association of Financial Professionals (AFP). The Corporate Cash Indicator survey found that finance executives are less optimistic about the economy in April 2017 compared with January. The survey, based on 212 responses, benchmarks the optimism of financial executives by measuring the overall percentage rise or fall in cash holdings (or expected cash holdings).

As the graph below shows, in Q1 2017 there was a +3 increase in the net percentage of companies expecting an increase in their cash holdings. The increase in cash holdings has been ongoing over the past year, despite the expectations of a decline in cash holdings in January 2017.

The AFP's Jim Kaitz said: “The rapid change in finance executives’ outlook comes as little surprise given the sudden rise in economic and political uncertainty. Corporate treasury and finance executives are responding quickly, and prudently, to the new environment.”