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CPO study: Optimism declines

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CPO study: Optimism declines

Worsening financial prospects and increased economic uncertainty suggest tighter times ahead.

Due to internal pressure from CFOs and their boards, a majority of America's chief procurement officers expect a drop in their operating costs and a strict business focus on margin improvement, according to newly-released study from professional services firm Deloitte. This is a significant change from last year, when CPOs were being asked to support the corporate growth agenda.

Market outlook – economic uncertainty lowers financial expectations

Market optimism has declined over the last year, particularly in the Americas. More than one-quarter (28%) of America's CPOs anticipate worsening financial prospects for their organizations than 12 months ago, which is compared to just under one-quarter (23%) of CPOs globally. This finding dovetails with America's CPOs' feeling of increasing financial and economic uncertainty – 63% of America's CPOs believe uncertainty has increased over the past 12 months, which is 9 percentage points greater than the global average.

63% of America's CPOs believe uncertainty has increased over the past 12 months.

"Weakening macroeconomic indicators and growing geopolitical instability have lowered CPOs' financial expectations for the near future," commented Brian Umbenhauer, principal and global sourcing and procurement leader for Deloitte Consulting LLP.

One positive finding, however, is that 6 in 10 of America's CPOs exceeded their savings target over the past 12 months. Softening commodity prices during the same period may be a key driver in the delivery of these savings.

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