Survey: CFOs Scale Back Economic Optimism, Look Ahead to Increased M&A

Executive optimism about the U.S. economy remains positive, though slightly less so than earlier in the year, according to new data from the third quarter CFO Signals survey from Big 4 firm Deloitte.

Canvassing 96 North American top finance leaders, Deloitte found that 54% of respondents remain positive about the broad economic outlook, down from 62% from last quarter. The trajectory is similar for opinions on company performance, with 66% of CFOs more optimistic about their financial prospects, down from 75% last quarter. Respondents also reported lower expectations for revenue, earnings, capital spending and dividend growth.

Among other key takeaways from the survey, which was conducted between Aug. 2 and Aug. 14:

  • Internally, CFOs cited talent and labor shortages, which are widespread, alongside retention, strategy execution and return-to-work logistics as their biggest risks. Externally, the continued impacts of COVID-19 and its variants were named the top risk, followed by inflation, regulation and supply chain constraints.
  • Despite these concerns, two-thirds of survey participants say now is a good time to take greater risks, citing attractive debt and equity financing.
  • Revenue growth expectations declined to 8.5% from 9.6% last quarter, while earnings growth dropped to 12.6% from 13.6%, capital spending to 8.8% from 12.4% and dividend growth to 3.8% from 4%.
  • Nearly half of CFOs (46%) expect to achieve significant company growth from M&A over the next three years.