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87% of U.S. CFOs say they somewhat depend on election outcome

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Staff Writer | October 3, 2016
Deloitte's third quarter CFO Signals survey reveals 87% of U.S. chief financial officers believe the future of their company depends at least somewhat on the outcome of the U.S. presidential election.
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Deloitte   CFO Signals survey
17 percent citing "strong" or "significant" dependence. Dependency is broad-based, with more than 75 percent of CFOs in all surveyed industries expecting at least some dependence.

Additionally, nearly two-thirds of all surveyed CFOs say corporate tax policy is a top-three priority for postelection policy clarity, with monetary/rate policy next at 37 percent.

In addition, while the proportion of U.S. CFOs who consider themselves Republicans mirrors levels from the fourth quarter of 2012 – the last time the survey asked about CFOs' political affiliations – the proportion identifying themselves as Democrats fell, from 16 percent in Q4 2012 to just 8 percent this quarter.

The percentage of U.S. CFOs who identify as "Independent or other" nearly doubled from 10 percent in Q4 2012 to 19 percent in the most recent survey.

Four business outlook metrics tracked by the CFO Signals survey for 26 consecutive quarters — CFO expectations for growth in revenue, earnings, capital spending and domestic hiring — reflect mixed sentiment.

While year-over-year revenue growth expectations rose to 4.2 percent from last quarter's 4.0 percent, this indicator is still among the lowest in the survey's history.

Earnings growth expectations fell to 6.1 percent, barely above the survey low of 6.0 percent recorded in the first quarter of 2016, and significantly lower than last quarter's 7.7 percent.

On the other hand, expectations for growth in capital spending rose slightly to 5.6 percent this quarter from 5.4 percent last quarter, well above the low of 1.7 percent in Q1 2016.

Similarly, domestic hiring growth expectations of 2.3 percent doubled from last quarter's reading of 1.1 percent.

This quarter, 71 percent of CFOs say they regard U.S. equity markets as overvalued – a new survey high – and up substantially from last quarter's 56 percent. Only 4 percent of CFOs say markets are undervalued, a new survey low.


 

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