Frustration recedes, optimism rises for CFOs

After years of frustration with the global economy, CFOs appear to have a more positive outlook about the future.

Optimism among CFOs about their companies and the economy in their countries increased in many of the countries and regions represented in Deloitte’s Global CFO Signals survey report for the first quarter of 2013.

A huge improvement was observed in North America, where more than half of CFOs expressed rising optimism and just one-fifth expressed rising pessimism in the survey.

In Europe, concern amongst CFOs over the currency crisis and possible exits from the EU has greatly diminished, according to the report. Business confidence in the UK has risen for the third consecutive quarter, the report said.

The rise in China’s GDP growth in the fourth quarter of last year may be reflected in some of the optimism in that country. Although 64% of CFOs there said China will experience slower growth over the next few years, 57% said recent global economic developments will not cause a decline in their financial projections.

Hiring appears likely to be strong in Australia, where more than one-third of CFOs expect to increase headcount in the next 12 months and optimism about CFOs’ own companies has risen.

The shift in attitude has CFOs looking for more growth opportunities after a long period of simply finding ways to survive. Looking internationally for growth is a priority in many countries, and mergers and acquisitions are seen as a likely target in many places, according to the report.

One of the most significant concerns for CFOs, particularly in North America, is regulatory pressure. Ninety per cent of CFOs in North America say that current and recent policy decisions or debates are having at least some impact on companies’ plans, according to the report. And in China, CFOs see the volume of regulation and uncertainty of regulatory interpretation as key challenges to doing business in that country.

CFOs also are reporting the ability to spend more time in a strategic role, according to the report. Sixty-five per cent of CFOs in China said their CEOs are instructing them to make strategy-setting, development and execution one of their top three priorities. And in North America, CFOs say their CEOs consider four decision-making duties – providing objectivity, providing a point of view, providing analytic rigor and challenging assumptions – among CFOs’ top contributions.

Senior editor Neil Amato contributed to this report.

—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.