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Deloitte CFO Signals™ Survey: First-Quarter Optimism Swells in Wake of US Tax Reform

  • Optimism regarding the health and trajectory of the North American, European, and Chinese economies all hit new survey highs.
  • Net optimism index rose from last quarter's plus 47 to plus 54 this quarter — another survey high; 59 percent of CFOs express rising optimism regarding their company's prospects, up from 52 percent last quarter.
  • As a result of tax reform, CFOs expect to raise their domestic investment, hiring and employee wages; many also expect accelerated earnings repatriation while their tax functions will face challenges on implementation of the new law.

NEW YORK, April 11, 2018  Deloitte’s CFO Signals™ survey for the first quarter (Q1 2018) of chief financial officers, representing many of North America’s largest and most influential companies, finds a surge in optimism among CFOs about the current and future states of major economic regions, as well as their own company prospects. Surveyed CFOs’ net optimism spiked to a high of plus 54 from last quarter’s plus 47, as 59 percent of the 155 CFOs surveyed said they were more optimistic about their own company’s prospects, while just 6 percent cited declining optimism.

In the wake of the US Congress’ passage of tax reform, CFOs’ assessments of the North American, European, and Chinese economies hit new survey highs. CFOs’ assessments of the North American economy grew even stronger this quarter, with nearly 90 percent of CFOs rating current conditions as good, up from 74 percent last quarter and a new survey high by a wide margin. Nearly 60 percent expect better conditions in a year. CFOs’ perceptions of Europe’s current state and trajectory both hit new survey highs, with 55 percent saying current conditions are good, up from 35 percent; and 51 percent expecting better conditions a year from now, up from 33 percent last quarter. Fifty percent of CFOs say current conditions in China are good, compared with 49 percent last quarter, and 37 percent expect better conditions in a year, down from 41 percent.

Over the past year, CFOs’ positive sentiment was underpinned by positive assessments of the North American economy and, more recently, by rising perceptions of Europe and China, CFOs continue to be strongly optimistic this quarter, and confidence appears to be further bolstered by the passage of tax reform in the U.S. And for those companies that expect repatriated earnings, investment is far and away CFOs’ top expected use for the windfall.

— Sanford Cockrell III, national managing partner, US CFO Program, Deloitte LLP

All key business outlook metrics, tracked by the survey for 32 consecutive quarters, rose to multiyear highs, largely on skyrocketing optimism in the U.S. Revenue growth expectations rose from 4.7 percent to 5.9 percent and sit at their two-year high. CFOs’ expectations for earnings growth rose from 8.4 percent to 9.8 percent, their highest level in nearly three years. Their expectations for growth in capital investment rose sharply from 6.5 percent to 11 percent, a five-year high. Finally, their expectations for growth in domestic personnel increased from 2 percent to 3.1 percent, a new survey high.

Where will CFOs’ companies place their business focus next year? About 64 percent of CFOs say they are biased toward revenue growth—among the highest levels in the survey’s history—and only 18 percent claim a bias toward cost reduction, one of the lowest levels in the survey’s history. CFOs’ bias toward investing cash over returning it to shareholders (57 percent versus 14 percent) increased slightly from last quarter and remains among its highest levels in the past five years. Their bias toward current product and service offerings over new ones held steady this quarter (40 percent versus 37 percent), and CFOs favor current geographies over new ones (61 percent versus 20 percent.) The recent strong bias toward organic growth over inorganic growth continued this quarter (60 percent versus 15 percent).

As companies ramp up for post-tax reform investment, CFOs voice even stronger internal concerns this quarter about driving initiatives, and finding and retaining talent. With global economic performance stronger now, many CFOs’ external worries have shifted toward their own company’s ability to capitalize on opportunities and toward external risks that could hurt future growth. CFOs continue to voice strong concerns about the impact of Washington uncertainty on economic performance, including around the future of U.S. trade policy.

This quarter’s survey asked CFOs a series of questions about the new tax law changes. When asked about what impact the US corporate tax laws will have on their company, 46 percent of CFOs expect higher investment in U.S. operations versus just 6 percent for non-U.S. operations. On top of this, 46 percent of CFOs say they plan to accelerate their repatriation of foreign earnings, with 93 percent of these companies using the funds to invest in core businesses, 82 percent using them for new businesses, and 77 percent using them for investment in R&D and innovation.

A range of questions continue to emerge from CFOs about how tax reform will impact their organizations, it continues to be important for CFOs to have discussions with other senior executives and investors to keep them informed about what their business might look like financially and operationally under the new law.

— Rochelle Kleczynski, partner and national tax reform leader, Deloitte Tax LLP

As a direct result of tax reform, 31 percent of CFOs expect to increase domestic hiring and 38 percent anticipate raising wages. With regard to using repatriated cash, 55 percent expect to use it to hire new employees, 43 percent to raise wages, and 23 percent to pay one-time bonuses.

Tax reform was intended to increase companies’ domestic investment, hiring and pay, and CFOs’ survey responses seem to indicate that the new tax law will aid all of these to a very substantial extent. There’s still a challenge, however, with CFOs voicing even stronger concerns about their ability to secure key talent and deliver major initiatives.

— Greg Dickinson, managing director, Deloitte LLP

To learn more about how companies are approaching major investments, this quarter, in conjunction with Deloitte’s CIO Program, CFOs were asked about their approaches to selecting, managing, and communicating around major information technology investments. While CFOs say a broad range of IT-related topics is being addressed at the board level, the leading topic appears to be IT risk/cybersecurity, selected by 89 percent of CFOs. Digital and innovation followed, selected by 55 percent of CFOs.

When CFOs were asked what initiatives the IT function has in place to help business leaders better understand technology, 58 percent select bringing new/emerging technologies to strategy conversations. CFOs also say their most common tactics for managing IT investments, costs, and reporting focus on joint business and IT ownership of the investment process (71 percent) and having defined processes and templates (55 percent).

The survey also found what appears to be a proliferation of management positions focused on managing, utilizing, and protecting IT infrastructure and data. Prevalence and reporting relationships for the positions vary considerably, especially by industry.

To see additional results from Deloitte’s first-quarter 2018 CFO Signals survey, download a copy of the report.


Each quarter, CFO Signals tracks the thinking and actions of CFOs representing many of North America's largest and most influential organizations. This report summarizes CFOs’ opinions in four areas: business environment; company priorities and expectations; finance priorities; and CFOs’ personal priorities.

The Deloitte CFO Signals survey for the first quarter of 2018 was conducted during the two-week period opening Feb. 12 and ending Feb. 23, 2018. A total of 155 CFOs responded during this time. Seventy-four percent of respondents were from public companies, and 87 percent were from companies with more than $1 billion in annual revenue. For more information, please see the report.

For more information about Deloitte’s CFO Signals, or to inquire about participating in the survey, please contact

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