Reality regarding the novel coronavirus (COVID-19) is setting in for financial executives, particularly those in manufacturing, consulting firm PwC said today.
PwC last month began surveys every two weeks of 313 chief financial officers because of COVID-19. In the third such survey, conducted April 6-8, respondents were more pessimistic than previously.
“We are clearly seeing a turning point,” Tim Ryan, PwC chair and senior partner, said on a conference call. “We are clearly in a recession at this point. Financial leaders at companies, he said, are trying to determine “how long and how deep” the downturn will be.
With the new survey, 26 percent of U.S. CFOs expect layoffs, up from 16 percent in the previous survey.
“Companies are preparing for a longer recovery, which is forcing difficult decisions around staffing,” PwC said in a report.
In the industrial products sector, 36 percent of CFOs said they expected layoffs. That compares with 30 percent for consumer markets and 13 percent for financial services.
U.S. industrial product companies “are struggling on several fronts, including reduced demand, supply chain bottlenecks, production slowdowns (or even shutdowns), and workforce payroll and safety issues,” PwC said in the report.
“The immediate consequences appear grim, with 81 percent of sector CFOs expecting decreases in revenue and/or profits,” PwC said.
Also, 41 percent of industrial CFOs said it would take three to 12 months for operations to return to normal if COVID-19 ended today, according to PwC.