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CFOs Lower Their Assessment of North America’s Current and Future Economic Conditions and Say Their CEOs Want Them to Focus on Cost Reduction: Deloitte CFO Signals™ Survey 2Q 2023

NEW YORK, June 15, 2023

Key Takeaways

  • Thirty-four percent of CFOs rated the current North American economy favorably, down from 40% in 1Q23. CFOs also reported lower expectations for economic conditions to improve in a year across all five regional economies.
  • Economic/financial market risks (81%), geopolitical risks (57%), and cyber risks (56%) topped CFOs’ list of most worrisome external concerns. Execution risks to strategies and/or transformation topped CFOs’ list as their most worrisome internal concern, edging out talent risks after nine consecutive quarters.
  • Slightly more than half (54%) of CFOs indicate that their CEOs are asking them to focus on cost reduction while 40% say their CEOs want them focused on strategy/transformation.
  • CFOs’ optimism for their companies’ financial prospects fell to 30% from last quarter’s 32% and resulting in a net optimism of +6. 
  • The proportion of CFOs saying now is a good time to take greater risks dropped to 33% from last quarter’s 40%.
  • Growth expectations for revenue rose to 4.9% from 4.4%, while growth expectations for earnings dropped to 4.4% from 5.4%.

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 81% of respondents reporting revenue in excess of $1 billion. Just under one-quarter (23%) are from companies with greater than $10 billion in annual revenue. 

Economic outlook

CFO sentiment toward current conditions rose in four of the five economic regions covered in the survey. The exception is North America, where 34% of CFOs rated the current economy as good or very good, decreasing from 40% in 1Q23. 

However, across all five economic regions, CFOs are pessimistic about economic conditions improving in a year. The proportion of CFOs who indicated conditions in North America will improve in a year dropped to 34% from last quarter’s 54%. Just 15% of CFOs expect the European economy to improve in a year, down from last quarter’s 32%. Thirty percent of CFOs said they anticipate improving conditions in China, down from 41% in 1Q23. Better conditions a year out for the Asian economy, excluding China, fell to 27% from last quarter’s 32%. CFOs’ expectations for the South American economy to improve in a year dropped to 7% from 17%. 

Own company optimism and risk

The proportion of CFOs expressing pessimism for their companies’ financial prospects increased to 24% from 19% in the prior quarter, while those expressing optimism fell to 30% from 32%. As a result, CFOs’ net optimism slid to +6 from +13. The proportion of CFOs saying now is a good time to take greater risks fell to 33% from 1Q23’s 40% and remains below the two-year average of 43%. 

Key operating metrics

CFOs lowered their year-over-year growth expectations for earnings, domestic hiring, and domestic wages while raising growth expectations for revenue, dividends and capital investment. Earnings growth expectations decreased to 4.4% from 5.4%, growth expectations for domestic hiring declined to 1.4% from 2.3%, and growth expectations for domestic wages/salaries dropped to 3.8% from 4.3% last quarter. CFOs increased their expectations for revenue to 4.9% from 4.4%, dividends to 2.9% from 2.4%, and capital investment to 6.6% from 5.7%. 

Where CEOs want their CFOs to focus

In today’s business environment, slightly more than half of the surveyed CFOs reported that their CEOs are asking them to focus on cost reduction. More than one-third of CFOs said their CEOs want them focused on strategy/transformation, performance management, revenue growth, investment, and capital/financing. And more than one-quarter of CFOs noted their CEOs are asking them to focus on working capital efficiency and risk management.

Special topic: Enterprise risk and regulation

After nine consecutive quarters of concerns about talent and labor topping their list of internal concerns, CFOs indicated execution risks to strategies and transformations as their more worrisome internal risk (81%). Talent followed closely behind as the second most worrisome internal risk at 80%. 

More than three-quarters (81%) of CFOs ranked economic/financial market risks as their organizations’ top external risk. Geopolitical risk (57%) followed, despite consistently topping CFOs’ list of external concerns in several previous surveys. 

Overall, 52% of CFOs indicated that they are satisfied with their companies’ ability to identify external risks in a timely manner, compared with 66% who said they are satisfied with their ability to identify internal risks. Both sets of results suggest that there could be room for improvement.

Assessment of capital markets

Forty percent of CFOs indicated that U.S. equities were neither overvalued nor undervalued, while 21% viewed them as undervalued — up slightly from last quarter’s 14%. This quarter, the proportion of CFOs regarding U.S. equities as overvalued increased to 39% from 36%. Sixteen percent of CFOs found debt financing attractive this quarter, up slightly from 15% in 1Q23. Meanwhile, a higher proportion of CFOs found equity financing attractive at 24%, compared to 16 in the prior quarter. 

Key quotes

“External challenges like inflation and high interest rates and geopolitical uncertainties seem to be impacting CFOs’ assessments of macroeconomic conditions. We saw optimism tick upward last quarter, but presently, CFOs are expressing more caution and have a weaker appetite for taking greater risks.  

— Steve Gallucci, national managing partner, U.S. CFO Program, Deloitte LLP, and global leader, Deloitte Touche Tohmatsu Limited

“CFOs cite changing and increasing regulations among the biggest challenges in managing enterprise risk and regulatory compliance, with ESG accounting and disclosure requirements being of most interest to their organizations due to the impact on their ability to comply or other factors. At the same time, they indicate that they are generally satisfied with their organizations’ ability to identify internal and external risks in a timely manner.”

— Amy Kroll, principal, corporate compliance and operations offering leader, Deloitte LLP

Download the findings from the 2Q 2023 CFO Signals survey here.

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 second quarter of 2023 was conducted between May 1 and 15, 2023. A total of 122 CFOs participated in this quarter’s survey. This survey seeks responses from CFOs across the United States, Canada and Mexico, and the vast majority are from companies 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

About Deloitte

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