CFOs fear the worst for China’s economy but think Europe may be stabilizing

Traders work on the floor of the New York Stock Exchange.
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CFOs at some of the largest companies in North America have mixed impressions of the world’s largest economies, according to the third-quarter 2015 Deloitte CFO Signals survey.

Responses were collected from 114 CFOs during the two-week period ending August 21. Seventy-one percent of the CFOs were from public companies, and 84% were from companies with more than $1 billion in annual revenue.

When CFOs were asked, “How do you regard the current and future health of some of the world’s major economic zones?,” the only clear winner was North America, but some finance chiefs have found reason to be excited about financial prospects in Europe over the next 12 months.

China’s financial outlook

With the devaluation of the yuan, trillions of dollars in lost market valuation, and general business and consumer sentiment on the decline, it’s not a surprise that only 4% of CFOs had a “good” or “very good” outlook on China. That’s a decline of 19% from last quarter’s sentiment.

More than half of all respondents said the Chinese economy is “bad,” compared to 23% last quarter. Only 10% of CFOs believe it will get better over the next full year, and 47% said it will worsen over the next quarter.

Europe’s financial outlook

The outlook on Europe seems to be improving. While only 5% of CFOs said Europe’s economy was “good” or “very good” and 51% described it as “bad,” CFOs are still more optimistic than they were earlier in the year when 70% rated Europe’s economy as “bad.”


If there was one bright spot, it’s this: 30% of respondents said they believe Europe will be in a better position by the third quarter of 2016. That’s a 20% increase over the same question answered in the first quarter of this year.

Meanwhile, 25% of respondents expect the fourth quarter to be worse, about the same as last quarter.

North America’s financial outlook

Keeping in mind that the CFO survey was comprised of chief financial officers in America, Canada, and Mexico, the survey found a positive sentiment towards North American economies, with 59% of CFOs rating the current economic landscape as “good” or “very good.”

Only 3% of survey respondents describe the North American economy as “bad.”

More than half (55%) of CFOs believe conditions will be better a year from now, and only 5% expect conditions to worsen.