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CFO Insights: Strong optimism, but trade policy and geopolitics loom large

  • All - Deloitte Image

Jun 21, 2018

On June 21, 2018, our US firm released a publication on how as CFOs continue to express concerns about the future, worries about global economic growth have begun to rise again. And, while CFOs remain quite optimistic about their companies’ prospects, they voice continuing concerns about securing key talent and executing their strategies.

Last quarter’s positive sentiment largely continued this quarter. Although own-company optimism and expectations for the European and Chinese economies faltered a bit, expectations for revenue, earnings, and hiring all rose again (capital spending declined somewhat, but remains relatively high). In addition, CFOs’ confidence in US equity markets appears to have strengthened, with a comparatively low 63% regarding markets as overvalued (well below the above-80% levels from late last year).

Still, CFOs continue to express concerns about the future – especially around trade policy and geopolitics. As these concerns have risen, worries about global economic growth, which appeared to be declining for the past year, began to rise again. Moreover, although CFOs remain quite optimistic about their companies’ prospects, they voice continuing concerns about securing key talent and executing their strategies, and newly escalating concerns about avoiding complacency and improving organizational focus.

This quarter, we also asked finance chiefs about their scope of responsibility, the roles they brought to their current position, and the experiences most important for their successors. The findings show that CFOs appear to be taking on broader formal responsibility for business planning, IT/data, operations, and risk. It also appears that CFOs’ backgrounds are changing, with FP&A, controller, and other CFO positions the most common prior roles, but with younger CFOs comparatively more likely to cite investor relations and strategy roles. Accordingly, CFOs were likely to recommend that their successors have backgrounds in corporate strategy, in their industry, and in investor relations.

Review the publication on our US firm's website.

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