Deloitte Finds Greater Optimism Amongst CFOs as Economy Improves

By Michael Foster, Big4.com Blogger

In June, we reported that a Deloitte survey found that CFOs had become pessimistic about the North American economic environment, in addition to general skepticism about a global recovery. This pessimism was uncovered at a time when macroeconomic indicators, such as unemployment rates, the S&P 500 Index, home values in the U.S., and American consumer confidence, rose above post-recession lows after the subprime mortgage crisis in 2008.

After months of sustained equity value growth, CFOs have changed their tune. A new survey of CFOs by Deloitte showed that they were more upbeat about the global economy, as summer optimism replaced the pessimism of the spring.

Commenting on the report’s findings, Deloitte Chief Economist Ian Steward said that CFOs are still concerned about making balance sheets stronger. “While central bank activism helped fuel a strong rally in global equity markets between June and mid-September, the finance chiefs take a more cautious longer-term view. The fog of economic uncertainty is hitting investment,” he said.

Nonetheless, only 20 per cent of CFOs surveyed said that they expect revenues to fall over the next year, with rising demand in emerging markets, the U.S., and Japan offsetting Europe’s contraction.

Over half of CFOs surveyed said that they expect the UK to avoid another recession in the next two years, and a quarter of CFOs said that they expect a member country to abandon the euro in the next year.

According to the survey, the Federal Reserve’s actions and agreements on managing the euro have encouraged greater optimism amongst CFOs.