CFOs Appear Cautious Ahead of U.S. Election and Majority Say Result will be Consequential for Their Organizations: 'Deloitte CFO Signals™ Survey 3Q 2024'

NEW YORK, Sept. 18, 2024 /PRNewswire/ --

Key takeaways

• Just 14% of CFOs rate the current North American economy as good; 19% think it will be better in a year.
• Inflation tops CFOs' list of external risks. Technology transformation is the No. 1 internal risk.
• Only 12% of CFOs believe now is a good time to take on greater risk, down from 26% in 2Q24.
• A third (33%) of CFOs believe workforce issues should be a top priority for the federal government to address.

Why it matters to CFOs
Each quarter, CFO Signals™ tracks the thinking and actions of leading CFOs representing North America's largest and most influential companies. Since 2010, the survey has provided key insights into the business environment, company priorities and expectations, finance priorities, and CFOs' priorities. Participating CFOs represent diversified, large companies, with respondents reporting annual revenue in excess of $1 billion. Approximately 1 in 5 (19%) are from companies with greater than $10 billion in annual revenue.

Assessment of regional economic conditions
CFOs remain pessimistic about global economic conditions. Just 14% of respondents rate the current North America economy as good. Even less (5%) say Europe's economy is good right now. Other key regions fared little better. Fifteen percent of respondents think China's economy is good, while 12% say the economy in Asia (excluding China) is good. Only 8% of participants rate the South American economy as good now.  

According to the survey, CFOs don't seem convinced that economic conditions in some of these regions will improve in a year. Only 19% believe the economy in North America will be better in a year.  A mere 5% say the same for Europe, 9% for South America.

Equity and debt financing 
CFOs see debt and equity financing as substantially more attractive than in previous quarters. Fifty-five percent of CFOs surveyed view debt financing as attractive, and 52% view equity financing as attractive — levels not seen in more than two years.

Growth in key metrics
CFOs expect year-over-year growth across all but one of five key metrics the survey tracks. According to the survey, they believe revenue will increase by 2.4% in the next 12 months, with earnings growth of 2.1%. Respondents also expect capital investment to rise by 3.4%. Dividends are forecast to grow by 1.5%. While all represent hikes from the previous quarter, they still lag historical averages. Growth expectations for domestic hiring fell.

Internal and external risks and risk appetite
CFOs' most significant external and internal concerns reflect the challenges of the current business climate. Inflation is the top external concern (57%), followed by the economy (54%), and geopolitics (52%).

CFOs' greatest internal worry is technology transformation (49%), consistent with what was reported in the 2Q24 survey. In that report, CFOs' most significant internal concern was Generative AI adoption.

Survey responses show CFOs are becoming more risk averse — continuing a trend from recent quarters. Only 12% of CFOs believe now is a good time to be taking on greater risk. That's down from 26% in 2Q24 — and well below the two-year average of 32%.

Caution as the election nears
CFOs appear to be cautious ahead of the U.S. election. Fifty-eight percent of CFOs say the result of the election will be extremely or very consequential for their organization.

A third of surveyed CFOs say the federal government should prioritize addressing workforce issues.

Key quotes

"With interest rate cuts on the horizon, CFOs are evaluating financing options as more attractive for the first time since early 2022. Still, their optimism could be dampened by the uncertainty around the current election, which has perhaps tempered their appetite to take risks. In 2025, CFOs will be able to consider the impact of the election results and examine how new regulations or tax policies could impact their company's operations.

—     Steve Gallucci, national managing partner, US CFO Program, Deloitte LLP

"Election uncertainty is perhaps affecting not just CFOs' likelihood to take greater risks, but their perception of the economic environment across the five regional economies. After the election, CFOs will have a clearer perspective on the political landscape in which businesses will be operating. Meanwhile, a shift in U.S. monetary policy will likely boost willingness to pursue new investments or transactions."

—     Ira Kalish, chief global economist, Deloitte Touche Tohmatsu Limited

Download the findings from the "Q3 2024 CFO Signals" survey here.

Methodology
Every quarter, Deloitte's CFO Signals closely follows the thinking and priorities of leading CFOs who represent some of North America's largest and most impactful organizations. This report summarizes CFOs' opinions across four key areas: business environment, company expectations and priorities, financial priorities, and personal priorities.

The CFO Signals survey for the third quarter of 2024 was conducted between July 17 and 29, 2024. A total of 200 CFOs participated in this quarter's survey. This survey seeks responses from CFOs across the United States, Canada and Mexico. All respondents work at publicly traded or private organizations with more than $1 billion in annual revenue. Participation is open to all industries except public sector entities.

For more information about Deloitte CFO Signals or to inquire about participating in the survey, please contact [email protected].

About Deloitte
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SOURCE Deloitte