Capital Confidence Barometer for CFOs

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Every six months, we survey senior leaders from companies around the globe for our Capital Confidence Barometer. In March, we surveyed some 1,600 business leaders in 54 countries. This report represents the outlook of the more than 500 CFOs among that group. In some regions, a large majority of CFOs remain positive about the state of the global economy.

“On a global basis, most CFOs are confident about the economy.”
EY - Tom McGrath

Tom McGrath
EY Americas Senior Vice Chair — Accounts

EY - Annette Kimmitt

Annette Kimmitt
EY Asia-Pacific Accounts Leader

EY - Jay Nibbe

Jay Nibbe
EY Global Accounts Committee, Chair

A note from EY leadership

Welcome to the second edition of the CFO Capital Confidence Barometer. Every six months, we survey some 1,600 senior leaders at companies in 54 countries for our Capital Confidence Barometer. There are approximately 500 CFOs among them – and this report showcases their most recent views.

The global results show that most CFOs are confident about the economy and many economic indicators. Looking at specific regions, however, we see key differences. North Americans, for example, are especially positive. Buoyed by the economic recovery and more clarity around issues such as US Federal Reserve policies, CFOs there feel optimistic about corporate earnings and credit availability.

In Europe, the Middle East and Africa (EMEIA) region in general, more CFOs see their economies improving and are largely confident in bellwethers such as equity valuations and short-term market stability. Scratch the surface, however, and a divergence becomes evident in market outlooks. For example, while CFOs in Western Europe feel positive about recovery, less than half in Eastern Europe and the Middle East/Africa see their economies growing. Nearly one-fifth say conditions are actually worsening.

In Asia-Pacific, most of the region continues to reap the benefits of the economic recovery. China is a top destination for foreign capital. Positivity isn’t limited to China. Nearly 90% of CFOs across Asia-Pacific say their economies are either improving or stable. They report confidence in multiple economic indicators. Nearly six in 10 are optimistic about corporate earnings, and 52% are confident in credit availability.

The outlook on financial markets is similarly bullish: 53% are confident in the short-term stability of markets, while 42% have a positive view of equity valuations and the stock market.

Photo of Pip McCrostie, EY Global Vice Chair, Transaction Advisory Services

Pip McCrostie,
EY Global Vice Chair, Transaction Advisory Services

For leading global corporates, striking a balance between risk and reward has rarely been so difficult. Companies are grappling with geopolitical instability, a fragile global economic recovery, and seismic shifts in “megatrends” such as structural changes in the workforce and digital transformation — all at a time of unprecedented shareholder activism.

Many executives are now navigating this complexity with parallel priorities. They seek value through a renewed focus on cost-management strategies and returning rewards to increasingly active shareholders.

At the same time, some executives are also seeking value creation and top-line revenue through innovative organic growth and measured deal making. Larger, more transformational M&A is on the strategic growth agenda. Pipelines point to only modest increases in deals as low volume becomes the hallmark of a low-growth environment.

Increased deal values, rather than volumes, will likely be making headlines in the coming year. After a prolonged financial crisis and M&A market malaise, companies and boards are opting for quality rather than quantity.

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