Deloitte Q3 CFO Signals Survey Results - [CFO Weekly] Episode 21

Every quarter, Deloitte publishes the CFO Signals Survey ™. It’s a survey of some of the best and brightest financial executives in North America, and its purpose is to gain insight into how they’re feeling about the direction of the economy, trends they see in their respective industries and projections of the future state of finance.

It’s a report full of fascinating insights, trends, and projections, and you can download the Q3 high-level report HERE. On this episode of CFO Weekly, we were fortunate enough to spend a few minutes with Steve Gallucci, who is a managing partner at Deloitte, to talk all about the results of the survey, when CFOs think the economy may start to bounce back, and some of the industry shifts that have been driven by the COVID-19 pandemic.

How Are CFOs Feeling About the Economy?

Overall, it appears that CFOs, at least across North America, are feeling better about the economy than they were during the last survey. Given that the COVID-19 pandemic was all anybody was talking about, and the market was on a downward trend, it makes sense that confidence was low.

But this Q3 report shows a definite uptick, though nobody would say their company was out of the woods yet, and the economy certainly isn’t as “back to normal” as most would like it to be. The survey showed that 84% of the CFOs surveyed said that their companies were operating above 75% capacity, while 16% were below that 75% threshold, and most of those were in the industries that were hardest hit by COVID-19 (think travel, tourism, hospitality, etc.)

“While there were some folks still operating below 75% capacity, there were companies that are already above their pre-pandemic operating levels, which is great news,” Gallucci said.

There were even some that said they were back to or above pre-COVID levels, so there is most certainly better news to take in than in the Q2 report, but it’s not all sunshine and roses. Nearly every CFO did agree that the economic downturn was going to take longer to work itself out than any of them previously anticipated.

To top that all off, CFOs were overall far more bullish on the China economy than that of North America, and 84% of those surveyed said that they thought the equity markets were overvalued, which was a 29% increase from the Q2 report.

How are CFOs Feeling About Their Businesses? - Q3 CFO Signals Survey Results

Understandably, it’s a mixed bag. For those companies that were well-positioned to take on the COVID-19 pandemic (think home improvement stores, delivery services, etc.) they were far more bullish about their businesses. But for those that weren’t prepared, or were crushed by the pandemic, they were understandably far more reserved and cautious. The consumer space was obviously able to pivot far more quickly to be successful than the industries hardest hit, like airlines & hospitality.

“For those sectors that were well-positioned to deal with this crisis, they were far more bullish about the economy than those sectors that weren't prepared or were crushed,” Gallucci said.

Workplace Shifts Driven by the Pandemic

It’s undeniable that every industry in the world has seen drastic changes in the way they operate, and that those changes are almost solely driven by the needs that have arisen out of the pandemic.

Whether it’s talent strategy or customer strategy, the decisions on how to shift processes across the board have been top of mind for CFOs and executives as they change course from what they used to do pre-pandemic.

There’s no doubt been a huge shift in the number of office workers that are working from home. Most enterprises actually saw that their productivity didn’t decrease, but in some instances actually got more productive. There’s a newfound appreciation for remote work and what the future of work looks like, and how it may open up talent pools all over the globe.

It’s allowed consumer-based companies to better understand buying patterns for their customers, and moved their customer base to digital platforms, giving the enterprise more data on the consumer, and allowing them to be smarter about their supply chains and how they move products.

But not all the shifts have been positive. The real estate industry is certainly grappling with the reality of the work from home movement, and although it’s probably too early to tell the long-term impacts of the pandemic, a lot of commercial real estate companies are struggling to deal with the loss of tenants.

There’s so much more in the report to explore, from the impacts of climate change and social justice to employee well-being and industry trends. Make sure that you check out the report at Deloitte’s website, and listen to the entire interview to hear all the things that we didn’t discuss during this post.

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