Recovery is not likely until 2021, and retail/wholesale and services finance leaders report the strongest challenges, according to Deloitte's latest COVID-19 survey.
A new Deloitte COVID-19 CFO Survey reveals that 72% of CFOs are currently operating at or above 80% pre-crisis operating levels–essentially even with the 73% who said so in April. Only another 12% expect to reach this milestone by the end of this year, according to the survey of 118 Fortune 500 CFOs across North America.
The retail/wholesale, energy/resources, and services industries appear better off than in April, the survey found.
While some industries have rebounded faster than others—most CFOs expect a slow to moderate recovery: Over half expect they will not reach pre-crisis operating levels until 2021, with 17% expecting 2022 or later, the survey found.
The respondent CFOs are mostly optimistic about their ability to operate effectively, safely, and profitably as the US economy continues to reopen, the survey found. But they are least optimistic about the ability of the US economy–and their companies–to get back to their performance levels before the pandemic, and they are mixed when it comes to staffing and liquidity, the survey found.
Reactions by sector
In terms of current workforce levels, the proportion of CFOs who said none of their employees are working at less than half capacity rose substantially from 26% in April to 37% in June–but one-third of respondents said at least 20% are at less than half capacity. Not surprisingly, the retail/wholesale and services sectors are the most challenged, the survey found.
Technology and energy/resources CFOs expect a faster return to pre-crisis operating levels. Thirty percent of tech CFOs reported they are already at or are above normal operating levels.
Manufacturing, retail/wholesale, healthcare/pharma, and services are the most likely to expect a return to pre-crisis operating levels by the fourth quarter of 2021 or later, Deloitte said, although the latter two are largely split, with some expecting a faster return.
The manufacturing, retail/wholesale, and energy/resources sectors are particularly pessimistic about their timing for reaching pre-crisis revenue levels. Retail/wholesale is relatively pessimistic about operating profitably and also about employee layoffs and furloughs, according to the survey.
Nearly 70% of CFOs believe US equity markets are overvalued, and only 6% said they are undervalued.
The survey also found that 55% of CFOs believe Congress should provide further assistance to workers, families, and small businesses, while just 19% disagree. Forty-two percent said the US Federal Reserve should take further steps to bolster liquidity, with 24% disagreeing. The numbers expressing a neutral view were high for both statements, Deloitte said.
"With a substantial reopening of the economy underway, CFOs are largely optimistic about their companies' ability to operate effectively, safely, and profitably," said Greg Dickinson, managing director of the North American CFO Signals Survey, in a statement. "But they indicate significant doubts about how quickly their revenue and the broader US economy will return to pre-pandemic levels."
The Deloitte survey was conducted between June 18 and 19. More than 85% of respondents are at companies that generate over $1 billion in revenue, the firm said.
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