Deloitte “CFO Signals” Report 4Q 2012 – Notable Aspects

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 4th Quarter of 2012.

As seen in page 2 of the report, “Eighty-six CFOs responded this quarter. Three fourths of the CFOs are from public companies, and 77% are from companies with more than $1B in annual revenue.”

Here are some excerpts that I found notable:

from page 4 :

But that doesn’t mean CFOs aren’t worried about the impacts of the fiscal cliff solution on an already-stumbling global economy. In fact, the potential detrimental impacts of the fiscal cliff became CFOs’ “most worrisome risk” this quarter, surpassing global economic stagnation and the European crisis – both of which were stronger concerns last quarter. And they name fiscal policy as their top priority area for better policy clarity going forward (corporate tax policy is a distant second).

Those worries are being particularly felt in the U.S. and Canada where CFOs’ sentiment has declined – not so much because pessimism has risen, but rather because fewer CFOs are becoming more optimistic. In the U.S., net optimism+(the difference between the percent of CFOs expressing rising and falling optimism) fell from zero two quarters ago and -16 points last quarter to -21 this quarter. And in Canada, it fell from the 40s over the past two quarters to -6 this quarter.

from page 5:

The good news is that CFOs’ sales and earnings expectations have rebounded from their record lows last quarter. Sales are expected to rise 5.6%* overall, above last quarter’s survey-low 4.8%*. Earnings are expected to rise 10.9%* overall, above last quarter’s survey-low 8.0%*.

The bad news is that fiscal cliff uncertainty and/or skepticism appears to be depressing planned investments. Capital spending is expected to rise just 4.2%*, below last quarter’s survey-low 4.6%*. Similarly, R&D investment hit its lowest expected growth rate on record.

Perhaps most worrisome, employment expectations have remained dismal. Domestic hiring is expected to rise just 1.0%* overall. This is a bit better than the survey-low 0.6%* from last quarter, but 28% of CFOs are now expecting cuts – a new survey high.


I post various business and economic surveys because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these surveys.


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1464.49 as this post is written