The so-called "high-end" survey by Deloitte of firms averaging $5 billion in annual revenues shows optimism about future prospects plummeting, particularly in the United States.
In Canada, CFOs were still largely positive with the difference between those who felt their firm's prospects would improve over those who felt they would worsen measuring 42 percentage points.
That's down from the plus-57 result of the last quarter, but still far more upbeat than they were at the end of 2011.
By contrast, U.S. CFOs were the most pessimistic with an equal number answering the question negatively as positively. Sentiment among Mexican chief financial officers was in between.
Canadian executives were also more optimistic about the unemployment situation — only 16 per cent ranked it as a top concern compared with 59 per cent in the U.S.
The outlook for the Canadian and U.S. economies are similar, say analysts, with growth rates hovering around two per cent expected in the next two years.
But that's where the similarity ends. The U.S. still has not fully recovered from the 2008-09 recession, and only recouped about half the eight million jobs lost. Canada's gross domestic product is now above pre-recession levels, as is employment by close 250,000 jobs.
But even Canadian executives are less optimistic than they were three months ago, said Trevor Nakka of Deloitte, and overall, North American firms appear to be taking a wait-and-see posture.
"There's a caution out there," he said. "Business confidence has slipped and CFOs are positioning companies to hunker down. They are telling us they are paying a little less emphasis on (mergers and acquisitions) activity, paying a little less emphasis on expansion globally and they are focusing more on their existing markets and on cost management."
Nakka said that is a natural response to the growing uncertainty in the global environment, particularly the fear of contagion from Europe's financial distress.
But it does suggest that despite large cash reserves in hand, the continent's big companies will be cautious about future investments and hiring.
"Canadian CFOs have some concerns not about actual borrowing costs, but about what could be on the horizon with banking regulation and the potential for increased cost of capital," Nakka said.
"So there is a tendency in this type of time frame to hold on to cash."
Surprisingly, Nakka said, the executives did say they were not withdrawing completely from investment and hiring.
The survey showed that capital investment growth expectations receded in the quarter, but remain among the highest of the past two years. Meanwhile, hiring intentions remain modest, but positive.
Nakka said in the post-recession period, companies have focused on cutting costs, but he wondered how much further that strategy could go.
"There is an emphasis on keeping the business growing, an expectation of continued sales growth and that does take people," he said, "but it's at a prudent pace."
The findings are from a survey of 93 CFOs — 19 in Canada — from large companies, three quarters of which reported more than $1 billion in annual revenue. No margin of error was listed.
The Deloitte report is consistent with several other confidence surveys in recent weeks and month, both at the business and consumer level, which also pointed to spreading pessimism.
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