60% of CFOs rate the economy as bad and only 43% expect a better year

1641043621 60 of CFOs rate the economy as bad and only

Deloitte's Q3 Signals survey of Fortune 500 CFOs also finds that they are 60% more optimistic about their own financial expectations than the historical Q2 low of 11%.

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Sixty percent of CFO respondents rate the North American economy as bad with only 7% rating it as good, with those expecting a better position in a year slipping from 58 % to 43%, according to a Deloitte Q3 Signals survey of Fortune 500 CFOs. Europe was flat at 2% and 32%, while China came in at 22% and 47% - above North America for the first time, the study found.

The released study examined the current challenges facing companies, plans for the rest of the year, and the key role that CFOs have played during the pandemic. spread.

When it comes to their own financial expectations, however, the decisions are quite different. There has been a sharp rise (60%) in the number of CFOs being more optimistic about their company's financial prospects compared to 11% in the last quarter. But the Deloitte report noted that the optimistic index was down from last quarter's quarterly survey of -54 to +43 "a false finding since the metric compared to the last quarter when the reading was, for the most part, in the history of the survey. "


As the workplace reopens, CFOs aim to maintain / generate revenue and be flexible


Eighty-four percent of CFOs say they work at 75% or higher capacity - up from around 75% that said in April and June. Services, manufacturing, and retail / wholesale continue to show the most restrictive operating levels, the study found.

Regarding 2022 revenue projections, less than 40% of CFOs said they expect 95% or more of their budget revenues, averaging 74%. Healthcare / pharma and energy / resources are the most promising and retail / wholesale is the lowest, the study said.

When asked about their business density for 2022, companies in this quarter return to a revenue focus on the heels of the first-ever move in the last quarter toward cost reduction over revenue growth- enter, find the study. A move toward new offerings may signal market trends driven by pandemic, Deloitte said.

“After prioritizing cost cuts over revenue growth in Q3 - the first time in the seven years we have been monitoring this metric - CFOs marked a move back to growing revenues, "said Greg Dickinson, managing director of CFO North America. Study." Companies are clearly focusing on liquidity and cost control at the early stages of the year. -crisis, and now they are looking at the main growth line as they transition to ongoing and next normal challenges. '"

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Views on the capital markets in general are optimistic. With persistently low interest rates, 87% of CFO respondents said debt financing is attractive (up from 63%), the study found. With allocations climbing recently, the attractiveness of equity financing has risen to 39% (25% to 39% for public company CFOs, and 13% to 38% for private company CFOs). Eighty-four percent of respondents in this latest survey said U.S. equity markets are undervalued (up from 55%), the second highest rate in survey history, according to Deloitte .

As might be expected, CFOs' most common concerns are about new waves of COVID-19, increased shutdown, and volatile consumer demand, according to the study. Raised in this quarter 's survey, there were concerns that the pandemic could decline in the long run, Deloitte said.

Other results for this quarter include:

  • Equalities are enhanced: 84% of CFOs now say the U.S. equity markets are overvalued; with persistently low interest rates, 87% of CFOs say debt financing is attractive.

  • Growing inequality: 42% of CFOs say their company is at or above pre-crisis operating level or higher by the end of the third quarter, however, still 25% say 1Q22 or later .

  • Cash rates and liquidity: Two-thirds of CFOs say they have raised or received extra money, with the majority saying they are using it to fund investments against uncertainty.

  • Remote work: CFOs cited moves toward more remote working as the biggest strategic change driven by pandemic. There was also a higher focus on costs and productivity, acceleration of business digitization, and increased remote / no-friction consumer interaction.

“This quarter, CFOs made it very clear - remote work is here to stay,” said Steve Gallucci, national managing partner of Deloitte's chief financial officer program at Deloitte. "Indeed, the move to long-term remote working was CFOs' most well-known strategic move."

While many respondents acknowledged that they are still working under capacity, Gallucci said "there is more confidence that productivity can improve under changed workforms."

Respondents were also asked when they expect their company to return to near normal operating levels. Forty-two percent said they are already at / above their pre-crisis level or will be by the end of 2022 (up from May and June); however, 25% said in the first quarter of 2022 or later.


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