CFOs overwhelmingly expect a U.S. downturn by the end of 2020, with a slowdown seen as much more likely than a recession, according the Deloitte CFO Signals Survey. Their expectations for growth in revenue, earnings, hiring and wages declined (only capital expenditure rose); all metrics sit below their two-year averages.

Each quarter, CFO Signals tracks the thinking and actions of CFOs representing many of North America’s largest and most influential companies. Since 2010, the report has provided key insights into the business environment, company priorities and expectations, finance priorities and CFOs’ personal priorities.

Assessments of regional economies
CFOs’ perceptions of North America declined, with 80 percent rating current conditions as good (down from 88 percent) and 28 percent expecting better conditions in a year (same as last quarter). Perceptions of Europe declined, with 16 percent noting current conditions as good and only 8 percent expecting better conditions in a year; their views of China’s economy slid, with 20 percent indicating current conditions are good and 16 percent expecting better conditions in a year.

Downturn planning
Nearly 85 percent of CFOs said they expect a U.S. downturn by the end of 2020, and they overwhelmingly expect a slowdown rather than a recession. Those expecting a downturn were most likely to cite U.S. trade policy, business and credit cycles, and the impacts of slowing growth in China and Europe on the U.S. economy. A minority indicated they have detailed defensive or opportunistic plans; most CFOs expect to take defensive actions, including reducing discretionary spending and limiting or reducing headcount.

Key metrics
CFOs’ expectations for year-over-year revenue growth fell from 5.5 percent to 4.8 percent; their expectations for earnings growth slid from 7.3 percent to 7.1 percent; capital spending rose from 5.0 percent to 5.9 percent; and plans for hiring fell from 3.2 percent to 2.1 percent (all sit below their two-year averages). Their expectations for dividend growth declined from 4.5 percent to 3.9 percent, the lowest level since the fourth quarter of 2017.

See the full report here.