Home | Growth | Overall CFO sentiment at lowest level in three years.

Overall CFO sentiment at lowest level in three years.

By
Font size: Decrease font Enlarge font
Overall CFO sentiment at lowest level in three years.

Focus in 2016 on growth and efficiency, established markets and M&A in North America.

According to a Q4 survey of North American CFOs by professional services firm Deloitte, chief financial officers have revealed their thinking and actions for 2016, and most are focused on growing in current markets and maximizing company efficiency.

More than 90% of responding CFOs say a top three priority is increasing revenue in current markets, and almost 75% say a top priority is to reduce costs. Additionally, 63% of CFOs expect to seek M&A deals in 2016, largely focused in existing markets, for multiple reasons including scale efficiencies and acquiring customers in both current and new markets.

The threat of new and burdensome regulations rose to the number one external risk for CFOs.

The upcoming presidential election year in the US and the recent interest rate hike appear to be impacting CFOs' thinking. Forty-nine percent of US CFOs say the outcome of the upcoming elections will likely substantially impact future performance of their companies, while just under 30% say it will not. Overall, that difference is most pronounced in retail/wholesale, financial services and services, with twice as many CFOs in those industries saying the election outcome will likely affect their company's performance versus those who say it will not. The threat of new and burdensome regulations rose to the number one external risk for CFOs, while retaining key employees was the top internal risk.

"For several quarters now, our surveys have indicated CFOs' cautious optimism, with factors like the global economy and regulation weighing on decision-making," said Sanford Cockrell III, national managing partner of the US CFO Program, Deloitte LLP. "CFOs' conservative expectations for 2016 growth and investment seem to suggest declining confidence, especially when combined with own-company sentiment that is at its lowest level in three years."

More than 80% of CFOs this quarter say a top three cash use is investing for growth. In most industries, investment will be focused on North America; about 43% say their proportion of investments in North America will be higher next year compared with 22% for China and 17% for Europe. Overall, 94% of all surveyed CFOs say the US will be important to their five-year growth prospects.

1 2 »
Join PRESIDENT&CEO on LinkedIn

Subscribe to comments feed Comments (0 posted)

total: | displaying:

Post your comment

  • Bold
  • Italic
  • Underline
  • Quote

Please enter the code you see in the image:

Captcha