market volatility, the impact of growth-reducing protectionism, and the ominous ;attening of the yield curve, which has
predicted recessions accurately over the past 50 years.”
TIGHT LABOR MARKET REMAINS TOP CONCERN
Dif;culty hiring and retaining quali;ed employees
remains the most cited concern among CFOs, though the
47 percent of CFOs calling it a top-four concern is down six
points from the two-decade high the previous quarter.
Other top concerns include the cost of employee bene;ts,
government policies and economic uncertainty.
Consistent with predictions of recession, the Optimism
Index for the U.S. Economy slipped from 70 to 66 for the
quarter; CFO optimism about their own ;rms’ ;nancial
prospects dropped two points to 69 on a 100-point scale. Both
indices were at all-time highs earlier in 2018.
The survey’s CFO Optimism Index historically has been an
accurate predictor of future hiring and overall GDP growth.
With recession considered likely, optimism was mostly
static or fell across the world for the quarter. Canadian optimism was steady at 58, on a scale of 0 to 100. Optimism in
Europe dropped a point to 57, after falling 10 points to 58 the
previous quarter. Optimism is at 59 in the U.K., 56 in France
and 50 in Italy. Capital spending and employment both are
expected to grow about 2 percent over the next year.
Once again, the top concern among European CFOs
is attracting and retaining quali;ed employees, followed by
economic uncertainty and government policies. Currency
risk and employee productivity also were top ;ve concerns.
Optimism in Asia dropped eight points to 52. Economic
uncertainty remains the top concern. Other concerns in-
clude dif;culty attracting quali;ed employees and currency
risk. Capital spending is expected to grow about 10 percent
and employment 2 percent over the next 12 months.
Overall, Latin American optimism is 63 for the quarter
on a scale of 0 to 100. The Optimism Index is highest in
Brazil, at 69, where a new president seen as pro-business
was elected just as the country is emerging from a historic
recession. Optimism is 53 in Mexico, 57 in Chile, 61 in Peru
and 34 in Ecuador, where the government remains mired in
corruption investigations. Economic uncertainty remains the
top concern among Latin American CFOs. Other concerns
include government policies, weak demand and currency
risk. Capital spending is expected to grow 2. 2 percent and
employment 2 percent over the next year.
Business optimism in Africa rebounded to 51 for the quarter. Employment should fall about 1 percent in Africa over
the next 12 months. Median capital spending is ;at. African
CFOs are most concerned about economic uncertainty,
governmental policies and regulatory requirements.
ABOUT THE SURVEY
This is the 91st consecutive quarter the Duke University/
CFO Global Business Outlook survey has been conducted.
The survey generated responses from more than 500 CFOs,
including 226 from North America, 48 from Asia, 82 from
Europe, 122 from Latin America and 32 from Africa. The
Duke University/CFO Global Business Outlook survey polls
a wide range of companies (public and private, small and
large, many industries, etc.), with the distribution of responding ;rm characteristics presented in online tables.
The survey of European CFOs was conducted jointly with
TiasNimbas in the Netherlands, the France CFO society and
GEM. The survey of Latin America was conducted jointly with
Fundação Getúlio Vargas (FGV) in Brazil and Universidad
Andina Simon Bolivar in Ecuador. The Japanese survey was
conducted jointly with Kobe University and Tokyo Institute of
Technology, among others. The African survey was conducted jointly with SAICA. The survey was reprinted in the PEI
Journal with permission from Duke University’s Fuqua School
of Business. Detailed results, including tabular summaries of
the numbers in this release and results from previous surveys, are
available from firstname.lastname@example.org.
Difficulty hiring and keeping
qualified employees remains
the No. 1 concern of CFOs.