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CFO Insights — Special Edition: CFO Signals — 1Q13 Survey

Published on: Apr 01, 2013

First the good news: CFO sentiment and expectations have gotten better over the last two quarters. Now the bad news: given just how negative the last two quarters were, this is not saying very much.

In the final two quarters of 2012, we saw declining CFO optimism and this survey’s worst-ever expectations for sales, earnings, domestic hiring, and capital investment — notable because the CFOs in the survey represent many of the largest, better-resourced, and most diversified companies in the world. While it is clearly good news that their expectations have improved, it is not great news that the survey’s key metrics are all still below their long-term averages — especially since this group of CFOs tends to be pretty optimistic.

Moreover, judging from this quarter’s findings, there is not a strong case for substantial improvement anytime soon. CFOs’ most-cited driver of growth is the status of North American economies. But given that about one-quarter of CFOs named this factor a top growth impediment, and recently-released economic data has been only mildly (and debatably) positive, this is far from great news. In fact, this suggests that CFOs’ relative optimism this quarter may be more a matter of a “New Year’s optimism” than of a fundamental upturn.

In any event, CFOs and their companies appear poised to move forward. Cash-rich and lean, many are getting even more aggressive about finding and exploiting pockets of growth, spurring both organic and M&A expansion. And in the hope of igniting corporate engines, many are combating lingering uncertainty and stagnation by becoming more proactive about influencing government policy.


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