Most int'l firms expect economic growth in 2021 despite pandemic - survey
The survey noted that while the impact of the global pandemic affected every industry in different ways, "there was a common purpose in response."
By TOBIAS SIEGALThe Levi's retail store in San Francisco(photo credit: REUTERS)
Most international companies have expressed optimistic forecasts regarding their financial growth in 2021, despite the coronavirus pandemic causing companies around the world to shut down or limit their operations drastically in 2020, a new survey published by the international BDO firm association claims.The survey, titled "2021 BDO Middle Market CFO Outlook Survey" covered 600 chief financial officers (CFOs) of leading companies across a wide range of fields, including technology, manufacturing, life sciences, healthcare, energy and retail.The survey found that 60% of all participants expect an economic recovery in 2021 and that 63% forecast a profitability increase.The survey noted that while the impact of the global pandemic affected every industry in different ways, "there was a common purpose in response.""From protecting their work forces, to rethinking strategy, to preserving revenues and seeking relief to ensure stability, companies took action and took charge of their plans to resilience," the survey read.Unsurprisingly, companies in fields related to powering business continuity and manufacturing coronavirus treatment were among the most optimistic regarding growth in 2021.However, the survey found that CFOs of retail companies were much less optimistic than others on average. Unlike the overall positive approach expressed by CFOs of companies from all fields, retailers remained notably pessimistic regarding their companies' financial growth in the upcoming year, with 44% saying their situation would worsen this year and only 37% expecting it to get better. This is evident in the strategies these companies intend to implement in order to cut costs and maximize their profits.Examining the strategies that the various companies intend to implement in 2021 in order to apply their approaches to a realistic action plan, the survey found that 42% of all retail companies will be restructuring or reorganizing their operations.Moreover, 40% of all retail companies noted that they plan to reevaluate their real state assets in order to save money and utilize the space they use.
Yael Kender, director of BDO Digital, explained that the pessimistic approach held by most retail companies' CFOs is based on the reality imposed by the pandemic, making it more challenging for them to resume activity than others. "The pessimism of retail executives is unfortunately anchored in the picture of reality," Kender said. "Even if there are no further lockdowns, the limitations of distance, the need to wear a mask and the natural fear of being in a public place means it will take the retail industry a long time to return to the scope of pre-corona activity. The solution to this is increasing activity on the Internet and making the online experience as pleasant as a visit to the store by connecting the physical and digital worlds."Some 55% of all CFOs noted that they plan to increase research and development spending in 2021, indicating that the majority of companies do recognize that the coronavirus pandemic has required a readjustment to a changing reality, regardless of optimistic or pessimistic expectations for growth in 2021.Zev Stub contributed to this report.
