Global CFOs more negative on economy and expect big coronavirus hit to their company in 2020: Survey

Nearly half (48.8%) of leading chief financial officers surveyed in the latest CNBC Global CFO Council Survey say the Covid-19 pandemic will have a “negative” impact on their companies in 2020, while another 39% say it will have a “very negative” impact.

The CFOs who responded to this quarter’s survey have grown more certain about the negative outlook for their businesses, and more downbeat about the outlook for the global economy, in the three months since CNBC last surveyed them.

The CNBC Global CFO Council represents some of the largest public and private companies in the world, collectively managing more than $5 trillion in market value across a wide variety of sectors. 

In the first-quarter survey, conducted in March, 30% of CFOs said it was “too early to know” the impact the pandemic would have on their companies this year. Now only one of the 41 CFOs surveyed says it’s too early to know, and just two think the impact will be positive for their companies, leaving the overwhelming majority facing down a very tough 2020.

Forty-one of the 130 members of the council responded to the survey, which was conducted from May 14–28 (15 from North America, 10 EMEA and 16 APAC). 

CFOs’ outlook for the global economy has worsened since March as well.

On average, CFOs rated the GDP outlook for every region of the world as “declining,” with the exception of Brazil and Latin America, which are viewed as “strongly declining.” Both regions are currently global hot spots for new infections. Brazilian President Jair Bolsonaro has been criticized for his response to the pandemic.

That is the first time since CNBC began surveying the CFOs that any region has been given the worst possible rating. The “declining” outlook for the U.S. economy is its worst ever.

Fueling the downbeat view, a majority of CFOs report significant declines in demand for their companies’ products or services.

Sixty-four percent of CFOs say their companies have seen a decrease in demand in the U.S. since April 1, with most of them calling it a “major decrease.”

Meanwhile, 56.4% have seen a decrease in demand from Europe, and 30.8% have seen a decrease in demand from China. One bright spot in the results: 28.2% reported an increase in demand from China, a sign that some companies could be seeing the economic and consumer rebound that happens when a country starts to put the worst of the pandemic in the rearview mirror.