Deloitte CFO Signals™ Q2 2019 Survey: CFOs’ Economic Expectations Hit Multiyear Lows Amid Downturn Worries

CFOs' Economic Expectations Hit Multiyear Lows Amid Downturn WorriesCommPRO Editorial Staff

The key takeaways from the survey include:

  • The 1Q19 survey indicated that 84% of CFOs expected a downturn by the end of 2020; this quarter’s findings show that about 80% expect a downturn to be mild.
  • After rebounding slightly in Q1, CFOs’ own-company optimism dipped this quarter, continuing to sit among its lowest levels in the last three years.
  • CFOs express strong external concerns about the impact of U.S. trade policy on global growth. CFOs again note strong internal concerns related to acquiring and retaining talent; and growing concerns about rising labor costs.

Why it matters to CFOs? 

Each quarter, CFO Signals tracks the thinking and actions of leading CFOs representing North America’s largest and most influential companies. Since 2010, the survey has provided key insights into the business environment, company priorities and expectations; finance priorities; and CFOs’ personal priorities.

Sliding forecasts of regional economies

In Q2, CFOs’ perceptions of the North American economy declined slightly, with 79% of respondents rating current conditions as good (down from 80%) and 24% expecting better conditions in a year (down from 28% last quarter). Perceptions of Europe declined, with 10% viewing current conditions as good and only 4% expecting better conditions in a year. CFOs’ perceptions of China’s economy increased from Q1, with 26% indicating current conditions are good (20% in Q1); however, only 10% expect better conditions in a year (16% reported in Q1).

CFOs expectations for a downturn 

Almost all surveyed CFOs (97%) say they expect a U.S. downturn in the next two years, but they are split on the expected duration. Of those, 4 in 5 said they expect any downturn to be mild, and about half of those said they expect a short duration. Less than 5% expect a sharp, prolonged downturn.

Most worrisome risks

Before 2017, CFOs’ top external risks focused heavily on slow economic growth. In 2018, the fear of trade wars/ tariffs was the top external concern of CFOs. This quarter, CFOs again voiced strong concerns about trade policy—especially US-China policy—and even higher concerns than last quarter about political turmoil and gridlock. Regarding internal risks, CFOs’ top concern since Q217 continues to be acquiring and retaining talent.

Key quotes

“CFOs’ views on the future performance of the North American, European and Chinese economies settled around multiyear lows in Q2, and the overwhelming majority expect a downturn within two years. However, there may be a silver lining for businesses — 80% of CFOs expect any downturn to be mild — an indication that companies are prepared to face the challenges ahead.”  
 Sanford Cockrell III, national managing partner of the U.S. Chief Financial Officer Program, Deloitte LLP

“With mixed economic indicators in the US and observed slowing in several key economies around the globe, it is understandable that CFOs’ optimism dipped this quarter.  At the same time, we continue to see relative confidence across our client base in the underlying fundamentals of the US economy and CFOs are highly focused on acquiring and retaining talent—an important priority for all leaders with such a strong job market in the US.” 
 Joe Ucuzoglu, Deloitte US CEO 

Talent constrained, but not cash constrained

CFOs claim substantial talent constraints, but not capital constraints or shareholder pressure to use or return cash. Top uses of cash are investing for growth and productivity gains, with strong industry differences around dividends and buybacks. The vast majority of CFOs say they are making focused growth investments, not spreading bets across multiple opportunities.

Key Q2 metrics versus company optimism

The net optimism index declined from last quarter’s +16 to just +9 this quarter —the second-lowest reading in three years. Thirty percent of CFOs express rising optimism (down from 32%), and 21% cite declining optimism (up from 16%). In addition, expectations for revenue growth declined from 4.8% to 3.8%; earnings growth declined from 7.1% to 6.1%; and capital spending growth rose substantially from 5.9% to 7.7%.

Home markets are essential

Predictably, CFOs ranked their home markets most important to their company’s revenue growth over the next five years. The U.S. ranked universally high as a target for growth as well, but the importance of Canada and Mexico to U.S. CFOs has declined since Q4 2015. The survey identified that CFOs consider China the most important market outside North America.

Business focus for next year

Half of CFOs chose profitability as the most-cited focus area for growth over the next year. Corporate strategy and business growth were next, with about 40% of CFOs selecting these areas. CFOs indicate a bias toward revenue growth over cost reduction (48% versus 29%); investing cash over returning it (51% versus 18%); current offerings over new ones (47% versus 32%); and current geographies over new ones (66% versus 13%).


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

The Deloitte CFO Signals survey for the second quarter of 2019 was conducted during the two-week period opening May 6, 2019 and ending May 17, 2019. A total of 159 CFOs responded. Seventy-three percent of respondents were from public companies, and 82% were from companies with more than $1 billion in annual revenue.

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

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