Economic, Business Confidence Plummets Among U.S., Europe CFOs: FEI-Baruch CFO Outlook Survey

Business and global economic confidence among Chief Financial Officers continues to dive to some of its lowest levels in over a year, according to the most recent survey "CFO Outlook" survey conducted by Financial Executives International (FEI) and Baruch College’s Zicklin School of Business.

The quarterly “CFO Outlook Survey,” which polls CFOs of public and private businesses in the U.S. and Europe (Italy and France) on their economic and business confidence and expectations, reveals that CFOs are uncertain about the financial and political turmoil engulfing them and impacting their business outlook. 

In the most recent CFO Outlook Survey, 309 corporate CFOs from the United States and 91 corporate CFOs from Italy and France were interviewed electronically between October 17th – October 31st. CFOs from both public and private companies and from a broad range of industries, revenues and geographic areas, including some off-shore companies, are represented.

The U.S. survey respondents are members of Financial Executives International; France survey respondents are members of Association Nationale Des Directeurs Financiers Et Du Controle De Gestion (DFCG) and Italy survey respondents are members of Associazione Nazionale Direttori Amministrativi E Finanziari (ANDAF). Financial Executives International has been conducting surveys gauging the country’s economic outlook from the perspective of CFOs for more than 11 years.

Other areas of interest polled in the most recent CFO Outlook survey include:
 

  • President Obama, Global Competitiveness, National Debt
  • Global Leadership: CFOs differed by region when it came to the global leaders they respected most;. 
  • Hiring: Despite their pessimism about the economy, a surprising 54 percent of U.S. CFOs are still planning to hire additional employees at their company in the next six months...a similar sentiment to what was reported in the previous quarter. 
  • Unemployment: U.S. and European CFOs are both forecasting generally high unemployment rates for the next year
  • Taxes: With respect to tax reform proposals, U.S and European CFOs were least willing to give up the exclusion of employers’ contributions for their employees’ medical insurance premiums and medical care in exchange for lower business tax rates.  For U.S. respondents, the mortgage interest deduction (18%) was the next tax benefit they would prefer not to lose, closely followed by the exclusion of contributions to and earnings of employer-provided and individual retirement plans (17%), which was also favored by 23 percent of CFOs in Europe.
  • Inflation: Concerns over inflation are worsening among European CFOs, but it appears to be less of an ongoing concern among their U.S. counterparts.
  • Oil Prices: This quarter, CFOs also expect oil prices to drop and remain under $100.
  • Risk Controls: Most U.S. CFOs have not considered increasing budgets toward improving risk management controls (65%); the majority of European CFOs have considered increasing their budgets in this area (56%). CFOs believe risk management oversight should lie at the Board level (39% of Europe CFOs and 33% of U.S. CFOs), but many take the responsibility on themselves, believing the task should fall with the CFO (25% of Europe CFOs and 29% of U.S. CFOs).

Fraud: In today’s highly digital world, 53 percent of European CFOs stated that they regularly review content on their company’s social media activity to identify potential fraudulent activity, compared with only 34 percent of those in the U.S.
 

Read more in the FEI-Baruch CFO Outlook press release
 
 

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FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI

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