Deloitte CFO Signals(TM) Survey: Canadian Business Confidence Drops Dramatically, Affecting Plans for Investment, R&D and Domestic Hiring


TORONTO, ONTARIO--(Marketwire - Jan 9, 2013) - Continuing uncertainty about the global economy and measures the United States might take to deal with its budget deficit has pushed net optimism among North American CFOs in the fourth quarter of 2012 to its lowest level of the year. The decline was particularly large in Canada, where net optimism (the difference between the percentage of CFOs expressing rising and falling optimism) fell from +47 in the third quarter of 2012 to -6 in the fourth, while U.S. CFOs reported their net optimism fell from -16 last quarter to -21 this quarter. As a result, companies in both countries have lowered their growth expectations for capital investment, R&D, and marketing and advertising spending, and don''t expect much growth in domestic hiring.

Despite the drop in net optimism, the quarterly Deloitte CFO Signals™ Survey - which tracks the thinking and actions of chief financial officers representing North American companies averaging more than $5 billion in annual revenue - found that earnings growth expectations were improving in both Canada and the United States. But while U.S. CFOs also raised their sales growth expectations in the fourth quarter, Canadian CFOs lowered theirs to the lowest level in more than a year.

"Canadian companies appear to be increasingly concerned about a negative impact on their operations caused by ongoing economic problems in the United States and Europe," said Trevor Nakka, co-leader of Deloitte Canada''s CFO program. "This is leading many of them to take steps to preserve cash and protect revenues from existing markets rather than investing and expanding."

Canadian CFOs have lowered their estimates for sales gains to 5.5% this quarter from 6.5% last quarter (and 7.4% in the first quarter of 2012), while U.S. CFOs raised their estimates slightly, from 4.3% to 4.8%. Nevertheless, CFOs in both countries expect earnings growth will outpace sales growth, a trend that has continued for several quarters. Domestic hiring expectations have fallen considerably among Canadian CFOs, dropping to just 0.2% in the fourth quarter, down from 1.1% in the third quarter and 3.7% in Q1. U.S. hiring expectations recovered slightly to 0.7% from 0.2% last quarter but are still below the 1.9% in Q2 and 1.8% in Q1. Expectations for growth in capital investment, R&D spending and marketing and advertising are at new survey lows.

"Unlike in previous quarters, when companies had relatively high expectations for hiring and capital expenditures, we now see them pulling back on investments as they await greater certainty about what is going to happen in the United States and Europe," said Dick Cooper, co-leader of Deloitte Canada''s CFO program. "It''s no surprise that a lack of clarity on fiscal policy is one of the top challenges facing North American businesses."

The survey also showed a continuing evolution of the CFO role to include more responsibility for information and related technologies, with about half of all CFOs expressing dissatisfaction with the either the quality of the information they receive or with the flexibility of their IT systems. CFOs expect the top business-changing IT trends in 2013 to be mobile and social business, followed closely by customer data.

The Deloitte CFO Signals™ survey also revealed the following results (estimates are adjusted averages to reduce the effect of outliers):

  • Potential detrimental impacts of the "fiscal cliff" in the United States became the most worrisome risk for CFOs this quarter, surpassing global economic stagnation and the European crisis. But only one in five CFOs expected the U.S. to go "over the cliff" by the end of 2012, even though there is strong concern about political gridlock in Washington.
  • Despite the focus on the fiscal cliff, the European crisis still ranks in the top three of CFO''s most worrisome risks, but about 60 per cent of CFOs have no plans for addressing changes in the European situation, either because they have planned only for the status quo to continue or have no specific plans for any particular scenario.
  • Overall, CFOs say their companies'' top four challenges include revenue growth from existing markets (60 per cent), framing and/or adapting strategy (37 per cent), talent (33 per cent) and prioritizing investments (29 per cent). For Canadian CFOs, talent was tied with revenue growth from existing markets as their top challenge.
  • Improving finance''s ability to be a business partner is a constant struggle. To better serve their business units, CFOs said they most want to improve finance''s capabilities around strategic planning (52 per cent), IT/information management (48 per cent), and budgeting and financial planning (47 per cent).
  • Major change initiatives, changing regulatory requirements and strategic ambiguity are the three biggest job stresses for CFOs, while board relationships and demands appear to be a growing source of stress.

To download a copy of the survey, please visit:

The Deloitte CFO Signals survey was conducted for the fourth quarter of 2012. Seventy-seven per cent of the 86 CFO respondents were from companies with more than $1 billion in annual revenues, and three fourths were from publicly traded companies. There were 17 Canadian CFOs who took part, representing 20 per cent of the total surveyed.

Each quarterly CFO Signals report analyzes CFOs'' opinions in five areas: CFO career, finance organization, company, industry, and economy. For more information about Deloitte''s CFO Signals, or to participate in the survey, please contact

About Deloitte''s CFO Program

Deloitte''s CFO Program harnesses the breadth of Deloitte''s capabilities to deliver forward-thinking perspectives and fresh insights to help CFOs manage the complexities of their role, drive more value in their organization, and adapt to the changing strategic shifts in the market. For more information about Deloitte''s CFO Program, please contact or visit

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

About Deloitte

Deloitte, one of Canada''s leading professional services firms, provides audit, tax, consulting and financial advisory services through more than 8,000 people in 56 offices. Deloitte operates in Québec as Samson Bélair/Deloitte & Touche s.e.n.c.r.l. Deloitte & Touche LLP, an Ontario Limited Liability Partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Hill+Knowlton Strategies Canada
Mary Warner
Deloitte Canada
Vital Adam
Senior Manager - Public relations
+1 514 393-5281

View Comments (0)