This site uses cookies to provide you with a more responsive and personalized service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.

Bookmark Email Print this page

Fox Business Network Interview, June 30, 2014

Sandy Cockrell, national managing partner, U.S. CFO Program, Deloitte LLP, discusses the highlights from the Q2 2014 North American CFO Signals survey results.

 

Liz Claman
They hold the purse strings at corporations, so you need to listen to chief financial officers, and guess what? They’re largely optimistic, specifically about the North American economy, but much more bearish on both Europe and China. This according to Deloitte’s newest CFO survey. How will worries about the global economy impact CFO’s growth projections for the second quarter?

David Asman
Joining us now is Sandy Cockrell. He’s Deloitte’s CFO program national managing partner to break it all down for us. Sandy, I’ve got to say, last time you were here we were coming out of a contraction; a 3% contraction.

Sandy Cockrell
Yes.

David Asman
Most economists didn’t see it. Most of the bigwigs all around the world didn’t see. The American people did. They said they felt like…did the CFOs know that they were in a contraction at that time in the first quarter?

Sandy Cockrell
The first quarter they actually were more optimistic than they are now. It’s kind of a mixed bag right now. You’re right; they feel good about the North American economy, but China and Europe are really laggards. Basically today what they would say is, CFOs here in North America, we think the Chinese economy, only about 24% would say it’s good today.

David Asman
But let me just get this straight. You’re saying that they are more pessimistic now than they were last quarter when they were in the midst of a contraction.

Sandy Cockrell
I’d say they’re very cautious today. Basically we’ve got five solid quarters of net optimisms, the CFOs thinking about their next 12 months’ prospects for their company, so that’s very good. That’s very good data, but when you start to look at their sales growth, earnings growth, CAPEX spend, and their employment growth, it’s pretty muted, and it’s…although it came up, it’s still below the survey averages over the last few years.

Liz Claman
Employment is higher right now. They’ve got money on their balance sheets. They’re actually spending a lot of money with mergers and acquisitions, I think, globally, $1-plus trillion more than the entire year last year, and yet, how is the hiring picture looking? Any better?

Sandy Cockrell
Well, it’s interesting, because I think over the last 3 or 4 years, CFOs worked with their companies to basically achieve all kinds of efficiencies, and they’re not willing to add to payrolls until they’re sure they see more of a hockey stick in the economy, and there is no clarity there as to when the economy’s really going to turn around.

David Asman
The manufacturing sector has really been taking it hard. I mean, they are stripped down to bare basics, right?

Sandy Cockrell
Yes.

David Asman
They need top-line growth in order to succeed.

Sandy Cockrell
Correct. And of all the sectors that were positive about their net optimism, manufacturing was the one sector that was negative. More pessimist than optimist from this past quarter, as well as if you go back and look at….they’re basically red in growth over the last 3 or 4 quarters, flat-lined at 5%. They just don’t see any growth in their businesses and they’re starting to get squeezed on their earnings line, so that makes it very tough.

Liz Claman
The report is called CFO Signals. Deloitte came out with it polling, how many CFOs?

Sandy Cockrell
Over 100.

Liz Claman
Over 100 to get the real sense of what’s going on in their minds in the purse strings. Thank you so much.

Sandy Cockrell
Thank you.

David Asman
Thank you, Sandy. Good to see you. We’ll see you in 3 months.

Liz Claman
Sandy Cockrell.

Related links

Share this page

Email this Send to LinkedIn Send to Facebook Tweet this More sharing options

Stay connected