Deloitte CFO Signals(TM) Survey: U.S. and European Economic Woes Temper Near-Term CFO Expectations in Canada
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 01/19/12 -- The spillover effect in Canada due to the US economic downturn, the economic turmoil in Europe, the impact of exchange rates and international trade policies, and the availability of capital for businesses are some of the main concerns of Canadian CFOs in the fourth quarter, according to the most recent Deloitte CFO Signals survey.
The quarterly survey - which tracks the thinking and actions of chief financial officers representing many of North America's largest and most influential companies - shows that while CFOs in Canada and the U.S. share many of the same perceptions about the economy and its effect on their businesses, Canadian CFOs are becoming less optimistic about what might happen over the next six months. Net optimism among Canadian CFOs dropped to just four percentage points in the fourth quarter, down from 22 percentage points the previous quarter, with 28% of Canadian CFOs expecting worse economic conditions in the first half of 2012 compared to just 12% of CFOs in the U.S.
"There appears to be a growing concern that Canada may feel more of the effects of the global economic downturn in 2012 than has been the case to date," said Trevor Nakka, co-leader of Deloitte Canada's CFO program. "Our survey shows that reduced optimism is translating into CFOs establishing plans to manage and protect against lower year-over-year sales gains and earnings growth for Canadian companies. Top of mind for CFOs are careful management of domestic hiring in many parts of Canada, reductions in discretionary expenses and managing the cost of capital."
CFOs in both countries consider social policy and spending to be their top concern in the fourth quarter, but while U.S. CFOs see persistent unemployment as their next highest challenge, those in Canada are more concerned about environmental policies, such as regulations and carbon reporting, and capital cost and availability. Canadian CFOs are only half as likely as those in the U.S. to consider inflation a significant concern in 2012, but six times as likely to be concerned about international trade policy.
In response, CFOs are striking a cautious tone toward their growth and hiring plans for the coming year. As a result, they are tempering their expectations for year-over-year revenue growth (6.3% this quarter versus 6.8% last quarter) and their projections for domestic hiring (1.0% from 1.2% last quarter; in Canada, the figures are just 0.7%, down from 1.9% last quarter). The outlook on earnings growth has remained relatively steady among CFOs in both countries, with a modest increase in the U.S. (10.9% versus 10.5% last quarter) and a modest decrease in Canada (7.4% versus 8.0% last quarter).
"With few CFOs expecting economic conditions in North America to improve significantly in the first half of 2012, companies seeking earnings growth appear to be focusing more of their efforts on new markets, particularly foreign ones," said Dick Cooper, co-leader of Deloitte Canada's CFO program. "This growing emphasis on foreign markets is expected to lead to more offshore hiring in the near term but only limited gains in domestic hiring."
Management of retirement risk varies between Canada and the U.S., with 70% of Canadian CFOs saying future employees had been moved to defined contribution plans compared to just over 30% in the U.S. Canadian companies were also much less likely to freeze retirement plans or revise retiree medical plans than those in the U.S.
The Deloitte CFO Signals survey also revealed the following results (estimates are adjusted averages to reduce the effect of outliers):
To download a copy of the survey, please visit .
The Deloitte CFO Signals survey was conducted for the fourth quarter of 2011. More than 70 percent of the CFO respondents were from companies with more than $1 billion in annual revenues, and more than 75 percent were from publicly-traded companies.
Each quarterly CFO Signals report analyzes CFOs' opinions in five areas: CFO career, finance organization, company, industry, and economy. For more information about Deloitte's CFO Signals, or to participate in the survey, please contact .
Deloitte's CFO Program harnesses the breadth of Deloitte's capabilities to deliver forward-thinking perspectives and fresh insights to help CFOs manage the complexities of their role, drive more value in their organization, and adapt to the changing strategic shifts in the market. For more information about Deloitte's CFO Program, please contact or visit .
As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
About Deloitte
Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services through more than 8,000 people in 57 offices. Deloitte operates in Quebec as Samson Belair/Deloitte & Touche s.e.n.c.r.l. Deloitte & Touche LLP, an Ontario Limited Liability Partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Contacts:
Hill + Knowlton Strategies
Megan Ramsay
416-413-4602
Deloitte Canada
Vital Adam
Senior Manager - Public relations
+1 514 393-5281
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Datum: 19.01.2012 - 14:20 Uhr
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