Optimism about the economic outlook has sharply deteriorated in Europe and the US, according to a survey of chief financial officers around the world.

CFOs in the US who were pessimistic in the first quarter about the prospects for the regional economy outnumbered optimists by nine to one - the biggest margin since the question was first asked in 2001. More than half of US CFOs said that the country's economy was in recession.

Confidence among European CFOs hit a five-year low, with pessimists outnumbering optimists by six to one. However, only one in eight thought that their home country was in recession, in spite of a fall in the growth they were predicting for corporate earnings.

The quarterly survey of 1,007 CFOs in a broad range of public and private companies was carried out by CFO Magazine, Duke University in the US and Tilburg University in the Netherlands.

A third of the CFOs said their companies had been affected by the credit market turmoil.

The average cost of borrowing had risen about 60 basis points since the summer for European companies and in the US, the average had gone up by around 120bp.

For US CFOs, the cost of fuel and the depreciation of the dollar were top concerns, along with weak consumer demand.

Across the globe, the cost and availability of labour was a concern in all regions.

European CFOs said they expected corporate earnings to rise 4.6 per cent over the next 12 months - down from the 6 per cent expected in the previous quarter.

Their forecast for growth in capital spending at 3.7 per cent was also down on the last quarter of 2007 when growth was expected to be 4.9 per cent.

However, there was no change in the European CFOs' employment plans, with modest cuts expected in their European payrolls and a small increase in the number of staff overseas or through outsourcing.

US CFOs were more optimistic about earnings growth, forecasting 6.2 per cent growth - much the same as in the previous quarter. Domestic employment was predicted to grow modestly.

Those in Asia were much more bullish, with Chinese CFOs forecasting 13.8 per cent growth in earnings and others in the region 12.1 per cent. Predictions of jobs growth in their home markets were around 8 per cent, with salary increases of more than 9 per cent.