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CFO Insights — Special edition: Results from 2019 Q1 "CFO Signals" survey

Published on: Mar 28, 2019

In Q4 2017, CFO sentiment was riding high, buoyed by strong economic performance and prospects for lower taxes, lower health care costs, and less regulation. But something changed starting in early 2018, and by our Q4 2018 survey (following the U.S. midterm elections), CFOs’ sentiment and expectations were becoming less optimistic, citing worries about geopolitics, U.S. political turmoil, and trade policy.

This quarter’s findings continue the downward trend. Assessments of the North American, European, and Chinese economies all declined. Own-company optimism rebounded from last quarter’s very low reading, but still sits at its third-lowest level in three years. Expectations for revenue, earnings, domestic hiring, and wages declined (only capex rose), and all metrics sit below their two-year averages.

When asked about expectations for a possible U.S. downturn, nearly three-fourths of the CFO respondents said they expect a deceleration of economic activity by the end of 2020, but only 15 percent expect an extended decline. Those expecting a downturn cited three main factors: U.S. trade policy, the length of business and credit cycles, and slowing growth in China and Europe.

In addition, this quarter we asked about the role diversity and inclusion (D&I) plays in companies’ talent strategies and practices, and CFOs’ answers appear to indicate substantial efforts to use D&I to strengthen their talent bases.

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