CFOs Anticipate Economic Downturn in 2020
Friday, January 24, 2020
Expectations for a U.S. downturn have risen since earlier this year, with 97% of CFOs saying that a downturn (a slowdown or a recession) has already begun or will occur by the end of 2020 — well up from 88% in 1Q19, according to the latest CFO Signals Survey from Deloitte. Overall, 12% of CFOs say they believe a downturn has already commenced, and 14% say they already see signs of a downturn in their company’s operations.
In terms of macroeconomic expectations for 2020, CFOs cite falling expectations for consumer and business spending, and two-thirds say performance beyond 2020 will depend substantially on upcoming U.S. elections.
Perceptions of North America leveled off, with 69% of CFOs rating current conditions as good (68% last quarter). Assessments of the North American economy rebounded slightly this quarter with 23% of CFOs now expecting better conditions in a year — better, but still the second-lowest reading in more than six years.
In terms of perceptions of Europe’s economy, only 7% of CFOs say current conditions are good (up from 5% last quarter), and only 6% expect better conditions in a year (up from last quarter’s survey-low 2%). Perceptions of China’s economy have been mostly declining since early 2019. The proportion of CFOs who say current conditions are good fell from 20% to 18% (a three-year low), and just 11% expect better conditions in a year.