North America’s chief financial officers are less optimistic than they were three months ago, and they do expect an economic downturn before the end of 2020, but say is should be a mild one. That’s according to the latest CFO quarterly survey by Deloitte.
Deloitte said in a summary of its results that about 80% of CFOs said they expect any downturn to be mild, and about half of those said they expect a short duration. Less than 5% expect a sharp, prolonged downturn.
“These expectations may help explain why, even as CFOs’ expectations for revenue, earnings, and hiring growth continued to decline this quarter (all sit at two-year lows), their expectations for capital spending continued to rise—a phenomenon evident last quarter as well,” the summary stated.
Deloitte’s quarterly survey, called CFO Signals tracks the thinking and actions of CFOs from the U.S., Canada and Mexico, with the vast majority representing companies with more than $1 billion in annual revenue.
Among other 2nd quarter results:
- CFOs’ views on the future performance of the North American, European, and Chinese economies hit multi-year lows.
- Own-company optimism declined to the second-lowest level in the last three years.
- Expectations for revenue, earnings, and hiring growth all declined to two-year lows.
- CFOs claim substantial talent constraints, but not capital constraints or shareholder pressure to use or return cash.
- Top uses of cash are investing for growth and productivity gains, with strong industry differences around dividends and buybacks.
- The vast majority of CFOs say they are making focused growth investments, not spreading bets across several opportunities.