CFOs Say China, US Political Turmoil Pose Greatest Risk To Economic Outlook

Mar. 22, 2016 5:13 AM ETRINF
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Financial Sense

By FS Staff

CFOs in the US have grown less optimistic the last few quarters and are preparing for cloudy skies ahead. They cite a number of key risks to economic growth with China at the top of the list followed closely by political turmoil here in the US.

Here's what John Graham, the Director of the Duke CFO Global Business Outlook had to say on our podcast last Friday:

"We survey CFOs because we are asking a lot of questions about financial variables - do you plan to increase hiring or lay people off, what do you think will happen with your earnings, how about your capital spending plans - and CFOs know these numbers by heart. They don't have to go look them up and…more importantly, the survey is anonymous…

So, as long as business plans come true, we have a crystal ball forecasting the future because the CFOs are telling us their business plans and we're aggregating those business plans across companies giving us a sense of where the economy is going...

Since 2009 the outlook has increased and looked better and better until about the last three-quarters where it's now started to come back down. So I think we've gone from what I would call a moderately strong outlook maybe a year ago to a moderate outlook - get rid of that word 'strong'...we're still expecting positive growth but basically now we're talking more 1-2% GDP growth whereas a year ago we might've been talking 2-3%..."

Scroll down to read more of his comments, or click to hear a preview of his interview below. Subscribers can access the full audio by clicking here or via podcast on their mobile device.

"When we asked the CFOs in particular 'Why has the probability of recession gone up?'…they listed several

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