Deloitte presented the results of the CFO Signals survey for the third quarter of 2022, conducted between 1 and 15 August 112, with the participation of 112 CFOs from the United States, Canada and Mexico. The survey shows that almost half of Directors expect a recession in North America by 2023, but they are most concerned about inflation.
“Deloitte’s Q3 CFO Signals survey reveals that CFOs are dealing with the effects of inflation and the prospect of a possible recession. Some organizations are already taking steps to deal with slowing growth, including cuts in hiring, wage growth and capital spending. However, sustained inflation remains a more worrisome prospect for CFOs than a recession,” said Steve Gallucci, National Managing Partner, US CFO Program, Deloitte LLP.
Key Survey Facts:
– 46% of surveyed CFOs expect the economy to North America is in recession by the new year, while 39% expect the North American economy to be in a period of stagflation .
– The CFOs’ concerns about persistent inflation outweighed anxiety about the possibility of a recession almost 3 to 1.
– Only the 33 % of CFOs rate the current North American economy as good or very good, a sharp decline from 52% in the second quarter of 2022.
– Almost a quarter (24%) of CFOs who believe US equities are undervalued is the highest number since the Q1 CFO Signals survey16.
– National hiring growth expectations fell to 2.6% from 5.3% in the second quarter of 2022.
CFO sentiment towards current conditions in the 5 economic regions covered in the CFO Signals survey fell this quarter. For North America, 35 % of CFOs rated the current economy as good or very good, a notable decline in 52 % in Q224 . However, 29% of CFOs indicated that conditions in North America will improve within a year, versus 18 % from previous quarter.
Sentiment was equally gloomy for current economies in Europe, China and South America, with only 7% of CFOs seeing conditions as good or very good in each region, which represents a decrease from 2Q22. Asia’s economy excluding China fared slightly better as 18% of CFOs considered it good or very good.
The percentage of financial directors who expressed more optimism about the financial perspectives of their companies was reduced to 19% from 27% of the previous quarter. This figure is the lowest since the 2Q survey20.
Of According to the report, there was a slight uptick in the percentage of CFOs who said now is a good time to take on more risk, with a 35% compared to 35% in Q222. Inflation and geopolitics stood out more prominently among CFOs’ long list of external risks. Internally, talent, especially retention issues, continued to dominate CFOs’ list of internal concerns.
For more details on the report, go here.
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