Category Archives: Executive Surveys

“CFO Signals” Report – Excerpts

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 1st Quarter of 2015.

As seen in page 2 of the report, “Ninety-six CFOs responded during the two-week period ending February 20. Sixty-eight percent of respondents are from public companies, and 82% are from companies with more than $1B in annual revenue. For more information, please see the “About the survey” section of this report.”

Here are some of the excerpts that I found notable:

from page 3:

How do you regard the current and future status of the North American, Chinese, and European economies? Fifty-nine percent of CFOs describe North American conditions as good (near last quarter’s very high 63%), and 64% expect better conditions in a year (63% last quarter). Just 18% regard China’s economy as good (down from 34% last quarter), and only 13% expect improvement (down from 25%). Just 2% describe Europe as good, and only 10% see it improving in a year. Page 8.

What is your perception of the capital markets? Forty-six percent of CFOs say US markets are overvalued (down from 61% last quarter). An overwhelming 93% say debt is currently an attractive financing option, and one-third of public company CFOs view equity financing favorably (down from 48%). Page 9.

Compared to the past 12 months, how do you expect your key operating metrics to change over the next 12 months?* Revenue growth expectations fell to 5.4% from 6.0% last quarter, mostly due to declining expectations from CFOs in the oil and gas sector. Earnings expectations improved from 9.7% last quarter to 10.6% this quarter.  Capital spending expectations declined slightly to 5.2% from last quarter’s 5.5%, also influenced by lower expectations from the oil and gas sector. Domestic hiring expectations rose to 2.4%, matching their highest level in two years. Pages 11-13.

Compared to three months ago, how do you feel now about the financial prospects for your company? Continuing a string of eight straight prior quarters of positive sentiment, net optimism rose to a very strong +34.4. Forty-eight percent of CFOs express rising optimism (49% last quarter), and just 14% express declining optimism (improving on last quarter’s 16%). Net optimism is again lowest for Manufacturing, Energy/Resources, and Services. Page 14.

Overall, what external and internal risks worry you the most? Economic worries escalated, as did concerns about oil prices and the strength of the US dollar. Internal concerns about execution and availability of qualified talent are also substantial. Page 15.

What macroeconomic indicators does your company most closely monitor? Across industries, the most-tracked indicators are GDP (a lagging indicator) and interest rates (a leading indicator). Other popular leading indicators involve exchange rates, industrial production trends, and a variety of commodity price trends. Other popular lagging indicators are related to employment and inflation. Page 17

*These averages are means that have been adjusted to eliminate the effects of stark outliers.

from page 11:

Revenue and earnings

What are CFOs’ expectations for their companies’ year-over-year revenue and earnings?

Revenue*

Revenue growth expectations declined—largely due to lower Energy/Resources expectations:

  • Revenue growth expectations fell to 5.4% from 6.0% last quarter, and the median is again 5.0%. Eighty-six percent of CFOs expect year-over-year gains (lowest in more than a year), and variability of responses is very high relative to previous quarters. This trend is mostly the result of lower expectations in Energy/Resources.
  • Country-specific expectations are 6.1% for the US (up from 5.9%), 2.1% for Canada (down from 5.0%), and 3.1% for Mexico (down from 9.8%). Canada’s decline is mostly the result of lower expectations from Energy/Resources.
  • Healthcare/Pharma and Technology CFOs have the highest expectations at 8.8% and 7.4%, respectively, while Energy/Resources and Manufacturing CFOs have lowest expectations at -0.2% and 3.0%, respectively.

Earnings*

Earnings growth expectations improveddespite declining expectations from the Energy/Resources sector:

  • Earnings expectations improved to 10.6% from 9.7% last quarter. The median remained at 8.0%, and 79% of CFOs expect year-over-year gains (lowest in more than two years). Variability of responses is the highest it has been in three years (skewed to the high side despite low expectations for Energy/Resources).
  • Country-specific expectations are 12.3% for the US (up from 10.8% last quarter), 3.1% for Canada (down from 4.5% last quarter), and 2.8% Mexico (down from 10.5% last quarter).
  • Services and T/M/E CFOs have the highest expectations at 21.0% and 20.8%, respectively; Energy/Resources and Financial Services are lowest at -1.1% and 5.5%, respectively.

*All averages have been adjusted to eliminate the effects of stark outliers.

from page 13:

Employment

What are CFOs’ expectations for their companies’ year-over-year hiring?

Domestic hiring*

Hiring expectations improved and are again near their four-year high:

  • Domestic hiring expectations rose to 2.4%, up from last quarter’s 2.1% and matching their highest level in two years. The median remained at 1.0%, and 58% of CFOs expect year-over-year gains, just under last quarter’s 60%. Variability of responses is about average for this survey.
  • Country-specific expectations are 2.3% for the US (up from 1.7% last quarter), 1.4% for Canada (down from 2.2% last quarter), and 4.7% for Mexico (down from 6.1% last quarter).
  • Energy/Resources CFOs have the highest average expectation at 4.0% (driven by strong expectations for a few power and utilities companies), while Manufacturing CFOs have the lowest expectations at 0.5%.

Offshore hiring*

Offshore hiring expectations rebounded sharply:  • Offshore hiring rose to 3.1% from last quarter’s 2.0%. The median remained at 0.0%, and 48% of CFOs expect year-over-year gains.

  • Country-specific expectations are 3.2% for the US (up from 2.1% last quarter), 2.5% for Canada (up from 1.3% last quarter), and 3.0% for Mexico (up from 2.0% last quarter).
  • T/M/E CFOs have the highest expectations at 7.0%. Manufacturing and Services CFOs have the lowest expectations at 0.5% and 1.2%, respectively.
  • Increased offshore hiring expectations are consistent with results later in this report that indicate substantial offshoring of operations in response to broader economic trends.

*All averages have been adjusted to eliminate the effects of stark outliers.

Among the various charts and graphics in the report are graphics depicting trends in “Own Company Optimism” and “Economic Optimism” found on page 7.

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

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StratX, LLC (stratxllc.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

CEO Surveys 4th Quarter 2014 – Notable Aspects

On January 8, 2015, The Conference Board and PwC released the 4th Quarter Measure Of CEO Confidence.   The overall measure of CEO Confidence was at 60, up from 59 in the third quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this January 8 Press Release include:

CEOs’ assessment of current economic conditions was virtually unchanged. Approximately 52 percent claim conditions are better compared to six months ago, about the same as in the third quarter of 2014. Business leaders’ appraisal of conditions in their own industries increased slightly, with 43 percent saying conditions in their own industries have improved, compared with 41 percent in the previous quarter.

CEOs’ expectations regarding the short-term outlook were more optimistic. About 49 percent of business leaders anticipate economic conditions will improve over the next six months, up from 44 percent in the previous quarter. However, 46 percent expect conditions to remain the same. Expectations for their own industries remain subdued, with 36 percent of CEOs anticipating an improvement, up from 34 percent in the third quarter. About 53 percent expect no change in conditions.

The Business Roundtable also released its CEO Economic Outlook Survey for the 4th Quarter of 2014 last month.   Notable excerpts from the December 2 release, titled “CEOs Forecast Weak Economic Growth in 2015”:

The Business Roundtable fourth quarter 2014 CEO Economic Outlook Index ‒ which provides a picture of the future direction of the U.S. economy based upon CEOs’ plans for sales, capital spending and hiring ‒ declined moderately from the third quarter, with capital spending declining the most.

also:

CEOs said they expect 2015 gross domestic product growth of 2.4 percent, unchanged from their 2014 expectation.

also:

The Business Roundtable CEO Economic Outlook Index – a composite index of CEO expectations for the next six months of sales, capital spending and employment – decreased moderately in the fourth quarter of 2014 to 85.1 from 86.4 in the third quarter of 2014. The long-term average of the Index is 80.3.

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Please note:  This was reprinted from the EconomicGreenfield.com (published by StratX, LLC) post of January 8, 2015, titled “CEO Confidence Surveys 4Q 2014 – Notable Excerpts

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

“CFO Signals” Report – Excerpts

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 4th Quarter of 2014.

As seen in page 2 of the report, “One hundred and two CFOs responded during the two-week period ending November 21. Seventy-two percent of respondents are from public companies, and 82% are from companies with more than $1B in annual revenue. For more information, please see the “About the survey” section of this report.”

Here are some of the excerpts that I found notable:

from page 3:

How do you regard the current and future status of the North American, Chinese, and European economies? Views of North America are again strongest, with a very high 63% of CFOs describing conditions as good (up from 44% last quarter), and the same proportion expecting better conditions in a year (up from 55% last quarter). Thirtyfour percent regard China’s economy as good (up from 27% last quarter), and 25% expect improvement (down from 29% last quarter). Just 2% describe Europe as good, and only 13% see it improving over the next year. Page 8.

What is your perception of the capital markets? Forty-nine percent of CFOs say external financial and economic risks are higher than normal, and 61% believe US markets are overvalued (both numbers are about the same as last quarter). An overwhelming 88% say debt is currently an attractive financing option, and 48% of public company CFOs view equity financing favorably (up sharply from 30%). Page 9.

Compared to the past 12 months, how do you expect your key operating metrics to change over the next 12 months? Revenue growth expectations, which reached their three-year high last quarter, receded from 6.8%* to 6.0%* but are still comparatively strong. Earnings expectations, coming off their highest level in more than a year, declined from 10.9%* to a still-strong 9.7%*. Capital spending rose from 5.0%* to 5.5%*—mostly because US CFOs’ estimates bounced back from last quarter’s surveylow 3.5%* to 5.8%* this quarter. Pages 11-13.

Compared to three months ago, how do you feel now about the financial prospects for your company? Continuing a string of seven straight quarters of positive net optimism, net optimism rose to a very strong +33.3. Forty-nine percent of CFOs express rising optimism (44% last quarter), and just 16% express declining optimism. Net optimism is lowest for Manufacturing, Energy/Resources, and Services. Page 14.

Overall, what external or internal risk worries you the most? CFOs’ most worrisome risks largely focus on the degree to which troubles in Europe, Asia, and Latin America will ultimately impact performance at home. And many relay worries that policymakers will struggle in trying to spur growth. Page 15. 

*These averages are means that have been adjusted to eliminate the effects of stark outliers.

from page 11:

Revenue and earnings

What are CFOs’ expectations for their companies’ year-over-year revenue and earnings?

Revenue*

Revenue growth expectations declined, but are still among the highest in the last three years:

  • Revenue growth expectations fell to 6.0% from 6.8% last quarter. The median is again 5.0%, with 90% of CFOs expecting year-over-year gains. Variability of responses is near the survey low for this metric.
  • Country-specific expectations are 5.9% for the US (down from 6.2%), 5.0% for Canada (down from 9.3%), and 9.8% for Mexico (up from 8.8%).
  • Healthcare/Pharma and T/M/E have the highest expectations at 12.1% and 8.4%, respectively, while Energy/Resources and Retail/Wholesale CFOs have lowest expectations at 4.0 and 4.6%, respectively.

Earnings*

Earnings growth expectations declined, but are still relatively strongbolstered mostly by the Healthcare/Pharma and T/M/E sectors:

  • Earnings expectations fell to 9.7% from 10.9% last quarter. The median remained at 8.0%, and 86% of CFOs expect year-over-year gains. Variability of responses is again comparatively low.
  • Country-specific expectations are 10.8% for the US (11.6% last quarter), 4.5% for Canada (10.2% last quarter), and 10.5% for Mexico (7.2% last quarter).

*All averages have been adjusted to eliminate the effects of stark outliers.

from page 13:

Employment

What are CFOs’ expectations for their companies’ year-over-year hiring?

Domestic hiring*

Hiring expectations declined, but are again near their four-year high:

  • Domestic hiring expectations fell to 2.1%, down from last quarter’s 2.3%. The median remained at 1.0%, and 60% of CFOs expect year-over-year gains, consistent with last quarter’s level.
  • Country-specific expectations are 1.7% for the US (same as last quarter), 2.2% for Canada (3.5% last quarter), and 6.1% for Mexico (6.5% last quarter).

Offshore hiring*

Offshore hiring expectations declined, but are still relatively high:  •  Offshore hiring decreased to 2.0% from last quarter’s 2.6%. The median remained at 0.0%.

  • Country-specific expectations are 2.1% for the US, 1.3% for Canada, and

2.0% for Mexico.

  • T/M/E CFOs have the highest expectations at 3.8%. Retail/Wholesale, and Services reported less than 1.0%. Forty-four percent of CFOs expect year-over-year gains.

*All averages have been adjusted to eliminate the effects of stark outliers.

Among the various charts and graphics in the report are graphics depicting trends in “Own Company Optimism” and “Economic Optimism” found on page 7.

_____

StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

CEO Surveys 3rd Quarter 2014 – Notable Aspects

On October 8, 2014, The Conference Board and PwC released the 3rd Quarter Measure Of CEO Confidence.   The overall measure of CEO Confidence was at 59, down from 62 in the second quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this October 8 Press Release include:

CEOs’ assessment of current economic conditions, however, was more positive. Now, approximately 52 percent claim conditions are better compared to six months ago, up from 46 percent in the second quarter of 2014. Conversely, business leaders’ appraisal of conditions in their own industries declined, with just 41 percent saying conditions in their own industries have improved, compared with 48 percent last quarter.

CEOs’ expectations regarding the short-term outlook were less optimistic. Slightly more than 44 percent of business leaders anticipate economic conditions will improve over the next six months, down from 53 percent last quarter. However, nearly 51 percent expect conditions to remain the same. Expectations for their own industries are also more subdued, with 34 percent anticipating an improvement, down from 46 percent in the second quarter. About 51 percent expect no change in conditions.

The Business Roundtable also released its CEO Economic Outlook Survey for the 3rd Quarter of 2014 last month.   Notable excerpts from the September 16 release, titled “CEOs See U.S. Economy Underperforming in Next Six Months”:

The Business Roundtable third quarter 2014 CEO Economic Outlook Index ‒ which provides a picture of the future direction of the U.S. economy based upon CEOs’ plans for sales, capital spending and hiring ‒ declined moderately from the second quarter. Results show plans for capital expenditures, hiring and sales all decreased relative to the previous quarter, with hiring plans declining the most.

also:

CEOs expect 2014 gross domestic product growth of 2.4 percent, roughly the same as last quarter’s estimate of 2.3 percent.

also:

The Business Roundtable CEO Economic Outlook Index – a composite index of CEO expectations for the next six months of sales, capital spending and employment – decreased in the third quarter of 2014 to 86.4 from 95.4 in the second quarter of 2014. The long-term average of the Index is 80.2.

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Please note:  This was reprinted from the EconomicGreenfield.com (published by StratX, LLC) post of October 14, 2014, titled “CEO Confidence Surveys 3Q 2014 – Notable Excerpts

_____

StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

“CFO Signals” Report – Excerpts

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 3rd Quarter of 2014.

As seen in page 2 of the report, “One hundred and three CFOs responded during the two-week period ending August 22. Seventy-five percent of respondents are from public companies, and 83% are from companies with more than $1B in annual revenue.  For more information, please see the “About the survey” section of this report.”

Here are some of the excerpts that I found notable:

from page 3:

Business Environment

How do you regard the current and future status of the North American, Chinese, and European economies? Views of North America are still strongest, with 44% of CFOs describing conditions as good (up from 40% last quarter), and 55% expecting better conditions in a year (down from 60% last quarter). Twenty-seven percent regard China’s economy as good (up from 24%), and 29% expect improvement (up from 21%). Just 5% describe Europe as good, and only 23% see it improving over the next year. Page 8.

How do you perceive pricing and risk within the financial markets? Fortyseven percent of CFOs say external financial and economic risks are higher than normal, and 63% believe U.S. markets are overvalued. An overwhelming 86% say debt is currently an attractive financing option, and about 30% of public company CFOs view equity financing favorably. Page 10.

Compared to the past 12 months, how do you expect your key operating metrics to change over the next 12 months? Sales growth expectations rose from 6.1%* last quarter to 6.8%*—highest since the third quarter of 2011. Earnings expectations improved from 8.9%* last quarter to 10.9%*—highest since the first quarter of 2013. Capital spending, however, declined sharply to 5.0%*—lowest level since the third quarter of 2013. U.S. CFOs’ capital spending growth expectation of 3.5%* is a new survey low. Pages 11-13.

How does your optimism regarding your company’s prospects compare to last quarter?Even on the heels of six straight quarters of positive net optimism, net optimism registered a very high +32. Forty-four percent of CFOs express rising optimism (about even with last quarter), and just 12% express rising pessimism— the lowest proportion since the survey began in 2Q10. Net optimism is lowest for Manufacturing and Services at about +10. Page 14.

Overall, what external or internal risk worries you the most? Worries about the global economy declined this quarter, but geopolitical concerns rose markedly, with growing attention to conflicts in the Ukraine, Middle East, and Latin America. Page 15.

from page 11:

Sales, earnings, and cash flow

What are CFOs’ expectations for their companies’ year-over-year sales, earnings, and operating cash flow?

Sales*

Revenue growth expectations rose to their highest level in three years:

  • Revenue growth expectations rose to 6.8%—highest since the third quarter of 2011. The median is again 5.0%, with 89% of CFOs expecting year-over-year gains.
  • Country-specific expectations are 6.2% for the U.S. (up from 5.4%), 9.3% for Canada (up from 8.6%), and 8.8% for Mexico (up from 6.9%).
  • Healthcare/Pharma and Technology CFOs have the highest expectations at 12.9% and 11.3%, respectively, while Retail/Wholesale and Financial Services CFOs are at 4.8%.

Earnings*

Earnings growth expectations increased, driven mainly by the U.S. and the Healthcare/Pharma and T/M/E sectors:

  • Earnings expectations rose to 10.9%—the highest since the first quarter of 2013. The median remained at 8.0%, and 90% of CFOs expect yearover-year gains (a new survey high by a substantial margin). Variability of expectations is comparatively low.
  • Country-specific expectations are 11.6% for the U.S. (8.1% last quarter), 10.2% for Canada (11.3% last quarter), and 7.2% for Mexico (7.4% last quarter).
  • T/M/E and Healthcare/Pharma are both above 17%; Retail/Wholesale and Services are at 7.1% and 8.0%, respectively.

from page 13:

Employment

What are CFOs’ expectations for their companies’ year-over-year hiring?

Domestic hiring*

Hiring expectations rose to their second-highest level in four years:

  • Domestic hiring expectations rose to 2.3%, up from last quarter’s 1.6%.

This is the highest level we have seen since the second quarter of 2013. The median remained the same as last quarter at 1.0%, and 58% of CFOs expect year-over-year gains, consistent with last quarter’s level.

Country-specific expectations are 1.7% for the U.S (1.4% last quarter), 3.5% for Canada (2.4% last quarter), and 6.5% for Mexico (markedly up from 0.3% last quarter).

_____

StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

CEO Surveys 2nd Quarter 2014 – Notable Aspects

On July 9, 2014, The Conference Board and PwC released the 2nd Quarter Measure Of CEO Confidence.   The overall measure of CEO Confidence was at 62, down from 63 in the first quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this July 9 Press Release include:

CEOs’ assessment of current economic conditions was considerably less favorable. Now, 46 percent claim conditions are better compared to six months ago, down from 54 percent in the first quarter. However, business leaders’ sentiment regarding conditions in their own industries edged up slightly, with 48 percent saying conditions in their own industries have improved, compared with 47 percent last quarter.

CEOs’ expectations regarding the short-term outlook pulled back slightly in the second quarter. Currently, approximately 53 percent of business leaders anticipate economic conditions will improve over the next six months, down from 60 percent last quarter. Expectations for their own industries are less upbeat, with 46 percent of CEOs anticipating an improvement, down from 52 percent in the first quarter.

The Business Roundtable also released its CEO Economic Outlook Survey for the 2nd Quarter of 2014 last month.   Notable excerpts from the June 17 release, titled “CEOs Predict 2.3 Percent GDP Growth in 2014, Well Below Economy’s Potential” :

Results from the Business Roundtable’s second quarter 2014 CEO Economic Outlook Survey show CEOs expect 2014 gross domestic product (GDP) growth of 2.3 percent, representing below-normal growth compared to past economic recoveries, and well below the economy’s potential. Last quarter’s estimate for 2014 GDP growth was 2.4 percent. CEOs also expect a decline in expectations for capital expenditures, and a moderate improvement in the outlook for sales and hiring over the next six months. The Business Roundtable CEO Economic Outlook Index, which is a composite of expectations for investment, sales and hiring, increased to 95.4 in the second quarter from 92.1 last quarter.

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Please note:  This was reprinted from the EconomicGreenfield.com (published by StratX, LLC) post of July 14, 2014, titled “CEO Confidence Surveys 2Q 2014 – Notable Excerpts

_____

StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

“CFO Signals” Report – Excerpts

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 2nd Quarter of 2014.

As seen in page 2 of the report, “One hundred and thirteen CFOs responded during the two-week period ending May 23. Seventy-one percent of respondents are from public companies, and 81% are from companies with more than $1B in annual revenue. For more information, please see the “About the survey” section of this report.”

Here are some of the excerpts that I found notable:

from page 3:

Which external factors will substantially drive and/or impede your 
company’s performance over the next year? The North American economy,
industry factors, and technology advancements repeat as the top tailwinds. Policy,
regulation, and talent costs are the top impediments.

How do you regard the current and future status of the North American, 
Chinese, and European economies? Views of North America declined slightly
with 40% now describing conditions as good (42% last quarter), and 60%
expecting better conditions in a year (62% last quarter). Twenty-four percent
regard China’s economy as good (well below last quarter’s 37%), and just 21%
expect improvement (33% in 1Q14). Just 7% now describe Europe as good, and
only 27% see it improving over the next year.

What is your company’s business focus for the next year? CFOs still indicate
a bias toward “pursuing opportunity” over “limiting risk,” and growth is again biased
toward new offerings and existing geographies.

Compared to the past 12 months, how do you expect your key operating 
metrics to change over the next 12 months?* Sales growth expectations rose
significantly from last quarter’s 4.6% to 6.1% this quarter. Overall, earnings
expectations bounced back from a survey-low 7.9% last quarter to 8.9% this
quarter, but expectations declined among U.S. CFOs. Capital spending rose
slightly to 6.8%, but U.S. CFOs’ expectations declined from last quarter. Domestic
hiring expectations rebounded from last quarter’s 1.0% to 1.6%.

How does your optimism regarding your company’s prospects compare to 
last quarter? Coming off of five straight net-positive quarters, net optimism held
steady this quarter at +26. Sentiment declined substantially, however, for
Manufacturing CFOs.

Overall, what external or internal risk worries you the most? Worries about
economic health and government policy are still common, but industry- and
company-level concerns ramped up steeply this quarter.

from page 13:

Domestic hiring expectations rebounded from last quarter’s 1.0% to 1.6%
this quarter. The median rose to 1.0%, and 58% of CFOs now expect
year-over-year gains—well above last quarter’s 42% and the highest
level we have seen in two years. Just 16% expect cuts (comparatively
low). Variability of expectations matches the lowest levels in the survey’s
history.

Among the various charts and graphics in the report are graphics depicting trends in “Own Company Optimism” and “Economic Optimism” found on page 6.

_____

StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Duke / CFO Magazine Global Business Outlook Survey Of June 11 – Notable Aspects

On June 11, 2014 the June Duke/CFO Magazine Global Business Outlook Survey (pdf) was released.  It contains a variety of statistics regarding how CFOs view business and economic conditions.

In this CFO Survey, I found the following to be the most notable excerpts:

Survey results show nearly 60 percent of U.S. financial executives think the business
environment has been harmed by a lack of public trust of business and governmental
leaders. An even larger percentage of CFOs in Africa (64 percent), Europe (68 percent), Asia
(71 percent) and Latin America (79 percent) believe public mistrust is creating a drag on
the economy.

also:

About one-third of European CFOs believe that deflation is already or soon will occur in the
Eurozone and two-thirds of these firms believe that deflation will continue for two or more
years. Most see the effects of deflation as damaging to the economy.

“These findings are particularly surprising because last week’s actions by the European
Central Bank (ECB) had been widely anticipated at the time of our survey. These European
CFOs are effectively saying that the ECB’s actions will not be sufficient to stave off
deflation.” Harvey said.

The CFO survey contains the Optimism Index chart, showing U.S. Optimism (with regard to the economy) at 61, as seen below:

Duke CFO Survey U.S. CFO Optimism

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Please Note – The above is abstracted from the EconomicGreenfield.com (published by StratX, LLC) post of June 11, 2014, titled “June 2014 Duke/CFO Magazine Global Business Outlook Survey – Notable Excerpts”

_____

StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

CEO Surveys 1st Quarter 2014 – Notable Aspects

On April 9, 2014, The Conference Board and PwC released the 1st Quarter Measure Of CEO Confidence.   The overall measure of CEO Confidence was at 63, up from 60 in the fourth quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this April 9 Press Release include:

CEOs’ assessment of current economic conditions continued to improve. Now, 54 percent claim conditions are better compared to six months ago, up from 44 percent last quarter. Business leaders are also more optimistic about conditions in their own industries. Approximately 47 percent say conditions in their own industries have improved, compared with 41 percent last quarter.

CEOs’ short-term outlook also improved considerably. Currently, 60 percent of business leaders anticipate economic conditions will improve over the next six months, up from 50 percent in the fourth quarter of last year. Expectations for their own industries are more upbeat, with 52 percent of CEOs anticipating an improvement in conditions in the months ahead, up from 47 percent last quarter.

The Business Roundtable also released its CEO Economic Outlook Survey for the 1st Quarter of 2014 last month.   Notable excerpts from the March 18 release, titled “CEOs Expect Continued Slow GDP Growth with Moderate Increases in Sales, Hiring and Investment” include the following:

Results from the Business Roundtable’s first quarter 2014 CEO Economic Outlook Survey show a moderate uptick in CEO expectations for hiring, sales and capital expenditures and some improvement in the Business Roundtable CEO Economic Outlook Index. But the survey’s expectation for 2014 GDP growth was 2.4 percent, representing below-normal growth compared to past economic recoveries. This latest reading follows an expectation for 2.2 percent growth in the CEO survey taken in the fourth quarter last year.

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The survey results showed that 72 percent of CEOs anticipate sales will increase in the next six months, but only 37 percent expect to add U.S. employees and less than half expect to increase their companies’ U.S. capital investment.

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The Business Roundtable CEO Economic Outlook Index – a composite index of CEO expectations for the next six months of sales, capital spending and employment – increased in the first quarter of 2014 to 92.1 from 84.5 in the fourth quarter of 2013. The Index now stands above its long-term average level of 79.7.

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Please note:  This was reprinted from the EconomicGreenfield.com (published by StratX, LLC) post of April 10, 2014, titled “CEO Confidence Surveys 1Q 2014 – Notable Excerpts

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

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StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

“CFO Signals” Report – Excerpts

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 1st Quarter of 2014.

As seen in page 2 of the report, “One hundred and nine CFOs responded during the two-week period ending February 21. Sixty-nine percent of the respondents are from public companies, and 81% are from companies with more than $1B in annual revenue. For more information, please see the “About the Survey” section of this report.”

Here are some of the excerpts that I found notable:

from page 3:

How do you regard the current and future status of the North American,Chinese, and European economies? Views of North America improved, with 42% describing conditions as good (26% last quarter), and 62% expecting better conditions in a year (55% in 4Q13). Thirty-seven percent regard China’s economy as good (32% in 4Q13), and 33% expect improvement (38% in 4Q13). Nearly one third now see Europe improving in a year– a major sentiment shift. 

What is your company’s business focus for the next year? CFOs still indicate a bias toward “pursuing opportunity” over “limiting risk,” but there is a stronger risk focus this quarter. Growth is again biased toward new offerings and existing geographies.

Compared to the past 12 months, how do you expect your key operating metrics to change over the next 12 months?* Sales growth expectations rose slightly from last quarter’s survey low of 4.1% to 4.6% this quarter. Earnings expectations declined from 8.6% to a survey-low 7.9%. Capital spending held steady at 6.5%, but are below the survey average of 8%. Domestic hiring expectations declined to just 1.0% from last quarter’s 1.4%.

How does your optimism regarding your company’s prospects compare to last quarter?Coming off the first entire calendar year in which net optimism stayed positive, net optimism remained strong this quarter at +27 (down from +33 last quarter). But sentiment normally peaks early in the calendar year, and this quarter’s net optimism is the lowest for any first quarter on record.

Overall, what external or internal risk worries you the most?  Worries returned around the health and trajectory of both mature and developing economies. CFOs expressed worries that economies will falter due to weak growth and external shocks, and also about effects of slow job growth on consumer demand.

from page 14:

Domestic hiring expectations declined to just 1.0%, below last quarter’s 1.4% and among the lowest in the history of the survey. The median is again 0.0%, and variability of responses is very high. Forty-two percent of CFOs expect year-over-year gains (comparatively low), and 18% expect cuts (comparatively low).

Among the various charts and graphics in the report are graphics depicting trends in “Own Company Optimism” and “Economy Optimism” found on page 6.

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

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StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.