A survey from Grant Thornton LLP reveals a sharp and continual decline in optimism for chief financial officers (CFOs) across the U.S. Many of the same factors contributing to pessimism in the first quarter of 2022 are still bothering CFOs. However now, finance leaders are even more worried. In fact, the ‘2022 Q2 CFO Survey’ shows72 per cent expect hikes in interest rates will lead to a recession. This stands in stark contrast to the firm’s findings last calendar year. For instance, in September 2021, 69 per cent of CFOs had a positive outlook regarding the U.S. economy over the next six months. After a year rocked by recession worries and inflation, that figure now stands at 39 per cent in the firm’s latest survey. Increasing costs of goods and services topped the list of reasons for a negative outlook ‒ 73 per cent of CFOs cite this as a key stressor ‒ while increasing energy costs (71 per cent), supply chain challenges (66 per cent), rate hikes (64 per cent), and the increased cost of credit and capital (61 per cent) round out the list of top five reasons for pessimism. On the positive side, 65 per cent believe the economic impact of COVID-19 is waning ‒ an increase of 15 percentage points from the previous survey. And in an interesting juxtaposition to respondents’ recession worries, two-thirds (66 per cent) of those surveyed expect their companies will meet growth goals. Further, 61 per cent expect an increase in net profits over the next 12 months. “For some companies, inflation may be helping to drive growth,” says Enzo Santilli, Grant Thornton’s national managing partner for transformation. “Inflation can push revenue up even while volume is down. That can be good for some companies, but bad for others.”
- PWC