Daily News: January 30, 2019

Survey: CFOs Remain Bullish on 2019 Outlook

The CFO Alliance, a network of more than 7,000 CFOs and qualified finance executives representing middle market and emerging enterprises from all industries, geographies, sizes, and structures, released its 9th annual CFO Sentiment Study to provide insights into the strategic planning and financial outlook of CFOs for 2019.

The study surveyed over 580 senior financial executives from across North America, offering in-depth perspectives on how CFOs plan to deliver on changing expectations for their enterprises in the face of decreasing confidence in the global economy, increasing talent shortages and disruptions to industry and business model norms in 2019.

While nearly 75% of the CFO participants say they will commit to increasing top line revenues in 2019, more than half of these respondents also note that increasing revenues will be the biggest challenge for their enterprises in the year ahead. If the middle market is any indicator of how larger enterprises will perform, Wall Street and ‘Main Street’ should brace themselves for a roller coaster ride in 2019. While nearly two-thirds of study participants feel that the U.S. economy will remain strong or extremely strong in 2019, there is a dramatic decline in confidence in the global economy.

While last year, more than 75% of survey respondents characterized their confidence in the global economy as strong or extremely strong, over two-thirds of this year’s respondents did a complete reversal on this topic and characterized their confidence in the global economy as weak or extremely weak. In addition, this year’s results also showed a marked decrease in commitment to increasing enterprise margins and earnings with only about 50% committing to increased margins and about 60% increased earnings, a 15 percentage point drop from last year. At the same time, CFO respondents remain bullish on the overall performance of their respective industries, with almost 75% believing that their industry remains extremely strong or strong, and equally confident in their enterprise’s ability to access capital and/or credit, if needed.

CFOs believe enterprise success in 2019 will be driven by their emphasis on driving operations, through the people, the processes and the data behind operational performance. One finance executive survey participant framed the CFO’s mission in 2019 to “build relationships with Operations and to provide them the data they need—not what we think they need.”