Survey: CFOs’ caution continues to mirror mixed consumer confidence

Deloitte CFO Signals™ Survey: Despite Greater Optimism, CFOs at America’s Largest Companies Still Fear Stagnation, Public Policy Obstacles

CFOs’ caution continues to mirror mixed consumer confidence

According to Deloitte’s Q1 CFO Signals™ survey, the current state of the North American economies is both the main driver of growth – and the top impediment. Positive economic indicators appear to be boosting CFOs’ optimism, but fears of further stagnation are restraining their expectations for 2013 sales and domestic hiring.

The quarterly survey, which tracks the thinking and actions of chief deloittefinancial officers (CFOs) representing North American companies with collective annual revenues of more than $680bn, did indeed record greater optimism after two dismal quarters. Led by the U.S., net optimism (the difference between the percent of CFOs expressing rising and falling optimism) rose from -11 last quarter to +32 this quarter. Moreover, about half of CFOs expressed rising optimism, while just 20 percent expressed rising pessimism — a major shift.  The dominant cause may be a cyclical bias toward optimism at the beginning of the year.”Every year we’ve done the survey, we’ve seen optimism peak in the first quarter only to decline considerably in the following quarters,” said Sanford Cockrell III, national managing partner, CFO Program, Deloitte LLP. “For 2013 to be different, CFOs need some clarification on the public policy front and enough economic consistency and momentum to feel comfortable investing in growth.”

Public policy uncertainty seems to be a major drag at this point. In fact, more than 90 percent of CFOs say that current and recent policy decisions/debates – ranging from debt ceiling and sequestration policies to possible defense cuts – are having at least some impact on companies’ plans. It is tax policy that appears to be having the most substantial impact across industries, with some 75 percent of CFOs claiming at least some impact, and 40 percent indicating substantial or strong impacts.

The impact of public policy is clearly creating concerns. In fact, governments’ potential detrimental impacts on a stagnating global economy is at the Deloittetop of CFOs’ list of most worrisome risks. Particularly in the U.S., CFOs express strong worries about the effects of the government’s taxing and spending policies on consumer demand and the broader economy. In response, about 40 percent of CFOs say their most significant approaches to dealing with policy activity involve initiating or ratcheting up their public-policy advocacy efforts, including new or revised government-relations strategies, increased lobbying efforts, and an increased executive presence in Washington.

Despite these concerns, some CFO expectations did rebound this quarter. For example, CFO expectations for year-over-year earnings growth rose to 12.1* percent from 10.9* percent last quarter (well above 3Q12’s survey-low 8.0 percent), and CFOs’ outlook for capital spending jumped to 7.8* percent from last quarter’s survey-low 4.2* percent. Meanwhile, expectations for sales stayed relatively stable at 5.4* percent (compared to 5.6* percent last quarter), as did domestic hiring (0.9* percent versus 1.0* percent). A substantial proportion – 27 percent – of CFOs are now expecting cuts in domestic hiring.

“Although estimates have rebounded from survey lows, most remain below their longer-term survey averages,” noted Greg Dickinson, director, North American CFO Signals Survey, Deloitte LLP. “The best news, however, may be that many companies appear well-funded, lean, and ready to grow – and that they are looking for tailwinds and becoming more aggressive in finding growth opportunities.

Additional findings from the Deloitte CFO Signals Survey include: (estimates are adjusted averages to reduce the effect of outliers):

  • Most worrisome risks evolving. On the whole, economic concerns have largely transitioned from worries about crises/collapse to worries about persisting stagnation.
  • Boards focused on operational performance. Boards of directors appear predominantly focused on income statement metrics and risks to operational performance. Revenue growth/preservation is a substantial or strong focus for more than 75 percent of boards; risk management/mitigation and cost cutting are next at just under 60 percent and 50 percent, respectively. Boards appear relatively less focused on liquidity, investment, or raising dividends for shareholders.
  • Companies mostly on the offensive. Companies are generally more focused on pursuing opportunity than on limiting risk, more on growing and scaling than on contracting and rationalizing, and more on growing revenue than on cutting costs.
  • Agreement on government spending. There is general agreement around the need to cut spending in the largest budgetary areas (Social Security, Medicare and Defense). However, there is considerable diversity of opinion about which areas should be cut – no single category received more than 60 percent of the vote.
  • Finance is focused on planning. Managing financial planning and analysis (FP&A) is the most common “core finance” focus area, with half of CFOs citing it in their top three. Managing liquidity, finance strategy and finance talent are the next-highest priorities with about 40 percent to 45 percent of CFOs naming each in their top three. The top “business support” priorities are supporting strategy and supporting sales at 84 percent and 46 percent, respectively.

To download a copy of the survey, please visit:

*All numbers with an asterisk are averages that have been adjusted to eliminate the effects of stark outliers.

About The Deloitte CFO Signals™ Survey

The Deloitte CFO Signals survey was conducted for the first quarter of 2013. Eighty-five percent of the 106 CFO respondents were from companies with more than $1 billion in annual revenues, and 70 percent were from publicly-traded companies.

Each quarter, CFO Signals tracks the thinking and actions of CFOs representing many of North America’s largest and most influential companies. This report summarizes CFOs’ opinions in five areas: business environment, company priorities, company expectations, finance priorities, and CFOs’ personal priorities.

For more information about Deloitte’s CFO Signals, or to participate in the survey, please

About Deloitte’s CFO Program

The CFO Program brings together a multidisciplinary team of Deloitte leaders and subject matter specialists to help CFOs stay ahead in the face of growing challenges and demands. The Program harnesses our organization’s broad capabilities to deliver forward thinking and fresh insights for every stage of a CFO’s career – helping CFOs manage the complexities of their roles, tackle their company’s most compelling challenges, and adapt to strategic shifts in the market. For more information about Deloitte’s CFO Program, please contact or visit 

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.


SOURCE Deloitte

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