Trends

 

04 04 2014

04 04 2014

CFO Optimism Down in Q1

Despite economic growth and improved job reports, chief financial officers around the United States are feeling less optimistic than they have in three years, a new study found. Deloitte’s first quarter “CFO Signals” survey gathered responses from 109 CFOs from a variety of major companies and sectors and found financial leaders are feeling more pessimistic than in years past, fueled in part by price stagnation and concerns over continued growth in the economy.

According to the report, 47 percent of respondents said they were feeling an increase in optimism regarding company finances, while 20 percent expressed a fall in optimism for first quarter 2014, averaging out to a net optimism rating of 27 percentage points. This is down from last quarter, when a net 33 percent of survey participants said they were feeling optimistic about business. This quarter’s findings mark the lowest optimism level recorded since the survey began in 2010.

Survey presents mixed results

Year over year earnings projections fell to 7.9 percent, down from 12.1 percent last year, hitting the lowest rate recorded in the survey’s history. Despite the fact that first quarter survey results are usually more optimistic than the rest of the year, the recent survey also found CFOs aren’t feeling as excited as they usually are for the year ahead. According to the study, year over year expectations for sales growth moved upward slightly to 4.6 percent from last quarter’s 4.1 percent, but are down overall from last year’s 5.4 percent figure.

“We normally see a clear boost in CFOs’ sentiment and expectations in the first quarter of a calendar year, but the effects are far weaker this time,” said Sanford Cockrell, national managing partner at Deloitte. “There are clear concerns emerging on the stability of the economic recovery, price stagnation and flat employment affecting consumer demand. These are constraining expectations for 2014, but organizations still remain generally focused on growth over risk.”

The news was not all bad, however. More than half of the respondents – 51 percent – said they plan on spending working capital on growth and innovation, while 58 percent said they will approach growth by targeting select opportunities that will lend themselves to improved business practices and finances.

“It’s a positive sign that organizations are focusing on growth, but expectations for capital investment are not strong by historical standards,” said Greg Dickinson, director of Deloitte and manager of the survey.

Partly because they are focusing on new means of growth, 23 percent of respondents said they expect to carry out fundamental changes to their business strategies over the next 12 months.

In order to carry out these changes in large and small organizations alike, business leaders require the right business equipment for their needs. Whether this includes heavy equipment, machinery or the newest in technological advancements, business owners should consider contacting National Funding to find out more about their equipment leasing options. In addition to housing up to date technology and equipment, National Funding can also provide insight into financial options for a business.

Featured


  • Choosing a restaurant location

    How To Choose A Prime Location For Your Restaurant Business

    Restaurants can thrive when they're in a good location and suffer when they're in a less-than-optimal one. Changes ranging from the preferences of customers to downtown development and the closure of nearby businesses can all have an effect on the number of tables a restaurant serves each day. The influence of those factors means you… […]

  • Working capital loans for small businesses

    Working Capital Loans for Small Businesses

    National Funding knows that small businesses are the fabric of America. That’s why we’ve made your business, our business by providing thousands of working capital loans to small and midsize companies in every state in the country. Every business owner knows that working capital is the lifeblood of a business. It’s money for inventory, bill… […]

  • How to repair bad business credit

    How to Stretch Every Dollar For Your Small Business

    Small businesses don't always have a surplus of cash lying around. When your enterprise performs well or you have an exceptional month in terms of sales, you're shrewdly deciding how to best allocate that revenue to keep the company stable and grow in an effective, sustainable way. Because most small organizations don't have the endlessly… […]

  • Small Loans To Big Business Infographic

    From Small Loans To Big Business

    Nearly all large corporations have humble beginnings as small businesses. And for many, the road to becoming a big business was paved with financial assistance, in form of small business loans or infusions of working capital. Our infographic below, From Small Loans To Big Business, illustrates the business financing journey that some of the nation’s… […]