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35% of CFOs expect the economy to be even worse by 2023

June 16, 2022, 10:38 AM UTC

Good morning,

The U.S. Federal Reserve announced on Wednesday the highest interest rate hike in 28 years—0.75 percentage points—in an attempt to cool hot inflation. Meanwhile, CFOs’ overall optimism about the global economy and their own company’s earnings is free-falling. 

Just 18% of CFO indicate they expect North America’s economy to be better a year from now, down from 36% in Q1, and 35% said worse—up from 26%, according to Deloitte’s Q2 2022 CFO survey released today. In addition, 7% of CFOs believe Europe’s economy will improve in a year, a steep drop from 26% in Q1, and 19% expect China’s economy to improve, compared to 31% in the prior quarter, the report found.

Some finance chiefs have been vocal about being less optimistic. For example, AT&T CFO Pascal Desroches expects inflation to continue “for the foreseeable future,” he said at the Credit Suisse conference on Tuesday. “We’re going to have to look at pricing again as a potential leverage to help offset that,” Desroches said. “Inflation is probably the area that I worry the most about.” 

In May, when Desroches participated in Fortune’s Emerging CFO event, he noted that AT&T’s separation from DirecTV and WarnerMedia and the rising demand for fiber and 5G allowed the flexibility to create a strategy for raising prices. The company focused on offering incentives for customers with older plans to change to newer ones with more advanced features and choices instead of just charging more for all of their services. “We built in a fairly healthy level of inflationary expectations into our budget,” Desroches noted at the Credit Suisse conference. “With that said, it’s running harder than we thought.” 

As Deloitte’s survey didn’t gauge what steps finance chiefs are taking to prepare for a potential downturn, I asked Steve Gallucci, the global and U.S. leader of Deloitte’s CFO Program, what he’s hearing. “From our interactions with CFOs, we understand that many are working to reduce debt, increase margins, and seek efficiencies, including through technology,” Gallucci says. 

Matthew Hardt, CFO of Lineage Logistics, an industrial REIT, recently told me he’s betting on technology. “Supply chain issues continue to impact us through inflationary pressures, including labor and energy, among several other operating expenses,” Hardt said. “To address these inflationary pressures, we are looking inward to drive productivity into our operations with the use of automation and other advanced technology that we’ve deployed with the help of our data science team.”

Deloitte surveyed 97 CFOs in the U.S., Canada, and Mexico in mid-May. The “vast majority are from companies with more than $1 billion in annual revenue,” according to the firm. Overall, CFOs’ expectations for earnings growth at their own companies decreased to 8.4% from 9.2% in the prior quarter. And revenue growth expectations fell to 7.8% from 9.1%. 

However, CFOs in the energy and resources sector believe earnings look bright. “Although we didn’t ask for the underlying reasons for optimism, CFOs [in this sector] did indicate year-over-year growth expectations for revenue and earnings at 12.3% and 12.5%, respectively,” Gallucci says. “That’s an increase from 11.3% and 10.8% in Q1 2022.”

CFOs overall are less optimistic, but areas where finance chiefs did raise their growth expectations, are dividends, rising slightly to 4% from 3.9%, and domestic wages, where expectations increased to 5.3% from 5%. Talent remains top of mind, Gallucci says. The survey results “show that talent—and especially retention—are priorities for CFOs across industries,” he says.

See you tomorrow.

Sheryl Estrada

Upcoming event: Fortune’s inaugural in-person meeting of the CFO Collaborative, presented in partnership with Workday, will take place at Miller Union, Atlanta, on Wednesday, June 22, at 6:30 p.m. The featured speaker for the event will be Clint Watts, senior fellow at the Foreign Policy Research Institute and NBC News National Security Contributor. Watts will share his expertise on cyberterrorism, social media influence and Russian disinformation. If you’re a CFO interested in attending, you can find the registration form here. For further information, please email

Big deal

A report by SHRM (the Society for Human Resource Management) Strengthening Workplace Culture, released on June 13, found that globally 3 in 4 workers rate their workplace culture as good or very good. However, the Great Resignation "is sweeping the globe," according to SHRM. Almost half of workers globally (45%) have thought about leaving their current organization. Workers in Singapore are significantly more likely to indicate that they have thought about leaving their current job (57%), followed by workers in the U.S. (51%). Those who rate their culture as poor (64%) are more likely to have actively searched for a new job in the past six months, as compared with workers who rate their culture as good (22%), according to the report. The findings are based on a global survey of 9,464 workers. 

Going deeper

Experts flag 3 concerns with the proposed SEC climate disclosure rule, an MIT Sloan School of Management report, outlines three key points discussed at the MIT Golub Center for Finance and Policy's recent symposium. "Critics of the rule say that these requirements shouldn’t fall under the jurisdiction of the SEC, while advocates of the rule say it gives investors more transparency and holds companies accountable to their public promises," according to the report


Jennifer Biry was named EVP and CFO at McAfee Corp. (“McAfee”), an online protection company, effective June 20. Biry will succeed Venkat Bhamidipati. Biry joins McAfee from WarnerMedia, where she served as EVP and CFO. She brings over 20 years of experience in corporate finance, operational practices, and M&A. Prior to her most recent role at WarnerMedia, Biry served as CFO for three of AT&T’s largest business units, AT&T Consumer, AT&T Business, and AT&T Technology and Operations.

Rob Dillard was named CFO at Sonoco (NYSE: SON), a sustainable global packaging company, effective July 1. Dillard, 48, joined Sonoco in 2018. He most recently served as the company’s chief strategy officer. During his time with Sonoco, Dillard has led the development of the company’s overall strategy. Prior to joining Sonoco, Dillard served as president of Personal Care Europe and VP of strategy and innovation at Domtar Personal Care, a division of Domtar Corporation. Prior to that, he served as president of Stanley Hydraulics and VP of business development at Stanley Black and Decker.


“In stocks and crypto, you will see companies that were sustained by cheap, easy money—but didn’t have valid business prospects—will disappear. Like [Warren] Buffett says, ‘When the tide goes out, you get to see who is swimming naked.’”

—Mark Cuban, the Shark Tank investor and Dallas Mavericks owner, told Fortune

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