Deloitte CFO Signals Survey found Chief Financial Officials are anticipating a downturn. Expectations for a U.S. downturn have risen since earlier this year, with 97 percent of CFOs saying that a downturn (a slowdown or a recession) has already begun or will occur by the end of 2020 — well up from 88 percent in 1Q19. Overall, 12 percent of CFOs say they believe a downturn has already commenced, and 14 percent say they already see signs of a downturn in their company’s operations.
In terms of macroeconomic expectations for 2020, CFOs cite falling expectations for consumer and business spending, and two-thirds say performance beyond 2020 will depend substantially on upcoming U.S. elections.
Key Takeaways
- CFOs’ views on the trajectory of the North American economy improved somewhat; views on Europe and China remain poor.
- Contrary to a year ago, CFOs expect very low interest rates and 10-year bond yields; they again expect a strong U.S. dollar.
- Revenue and CAPEX expectations sit at or near three-year lows; hiring and earnings are among their lowest levels in the last nine years.
- CFOs cite substantial pressure to act on climate change; mostly from their employees, customers, and boards. More than 90 percent of CFOs say their company has taken at least one action in response to climate change, with the average CFO reporting nearly four.
- Consumer and business spending expectations have fallen; CFOs are less likely to expect higher industry revenue and prices.
“Compared to early 2019, companies appear to be taking more defensive actions related to downturn expectations—particularly around reducing spending and limiting or reducing headcount. While CFOs expect some form of US downturn by the end of 2020, the good news is that expectations of a full-blown recession have fallen sharply since 1Q19,” said Sanford Cockrell III, National Managing Partner of the U.S. Chief Financial Officer Program, Deloitte LLP
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