CFO Signals™: 2013 Q4 Results
Muted 2014 expectations despite improving economies
CFOs are still not planning for substantial growth and a growing number may be becoming more defensive.
This quarter's survey marks the first calendar year in which CFOs' own-company optimism stayed net positive for an entire calendar year. In fact, in three of our quarterly surveys (including this one), the proportion of CFOs citing improving optimism was more than 30 points above the proportion citing declining optimism and the lowest margin was a still-strong 18 points.
This is certainly good news and it seems very consistent with global economic conditions that are generally improving and with U.S. equity markets that are again hitting record highs. And this sentiment is particularly encouraging in a quarter punctuated by yet another legislative stalemate that left the U.S. government shutdown for 16 days.
But, when you dig a bit deeper into what CFOs are saying about their companies' business focus and performance expectations this quarter, the picture becomes less encouraging and more evocative of concerns about what the next few years will really hold for the fundamentals of business performance. It is good that conditions are improving, but real recovery relies on a level of expansion that has seemed “right around the corner” for a few years now. And this quarter's findings suggest CFOs are still not planning for substantial growth — and that a growing number may be becoming more defensive.