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Despite continuing political and economic uncertainty, a majority of participants in Deloitte’s 2017 1Q Global CFO Signals report noted optimism about the year ahead. Net optimism increased in 17 of the 21 regions where the survey was conducted, with some reaching new highs.
In North America, net optimism spiked to a survey-high +50. Nearly 60 percent of CFOs expressed rising optimism (up from 43 percent last quarter), with only 10 percent citing declining optimism (down from 20 percent). In Europe, the strengthening of the regional economy bolstered CFO sentiment across the board, with the strongest net optimism recorded among CFOs based in Austria, Finland and Sweden. And even in Asia, where the two countries reporting – China and Japan – have not expressed much optimism in past surveys, there are signs of some stabilization.
Patricia Buckley, managing director, economic policy and analysis, Deloitte Services LP, believes that the improvement in optimism, particularly in North America, owes much to the fact “that the underlying fundamentals of the US economy are in good shape.” In the first quarter, she noted, GDP growth was only 0.7 percent, but business investment picked up by 9.4 percent (the biggest uptick since 2013), according to the Bureau of Economic Analysis. This not only reflects company optimism but “will be important for driving future growth.”
Other members of the Deloitte Global Economist Network, which operates in more than 14 countries, point to the strength of the European economy as another source of increasingly positive outlooks. “This improved optimism comes on the back of strengthening growth in Europe,” explains Michael Grampp, European CFO Survey lead and chief economist at Deloitte AG (Switzerland). “Europe’s recovery gained traction in the final quarter of 2016 and was further boosted in early 2017 with a number of economic indicators suggesting resilience in the face of political uncertainty.”