Political, economic issues affect business investment

Business investment has been hurt by economic problems.

The business conditions around the country have been affected by both political uncertainty, as well as slow economic recovery, according to a survey from Deloitte. This situation could affect property management companies, as a lack of investment and earnings could have a direct effect on the commercial real estate industry.

Two-fifths of chief financial officers surveyed noted they weren't optimistic about sales growth this quarter, the 10th edition of Deloitte's CFO Signals survey explained. This was up from less than 30 percent from the previous quarter's figure.

"We are clearly witnessing a very tough environment for business – even for many of the largest and most successful companies in the world," said Sanford Cockrell III, national managing partner of the CFO Program for Deloitte. "When you take global economic conditions that are already difficult, and then add in the uncertainty that comes with elections and a fiscal cliff in the U.S., it is easy to see why CFOs' expectations would become more conservative."

CFOs expect performance to decline
The report explained that the average CFO response for the quarter's yearly sales growth should be 4.8 percent, which was significantly lower than the 6.6 percent during the previous quarter. Additionally, earnings growth fell from 10.5 percent to the latest level of 8 percent. The hiring projection was 2.1 percent last quarter, but this dropped to 0.6 percent. Capital investment also dropped to 4.7 percent from the previous figure of more than 11 percent.

Economic conditions at both the national and global levels was cited as the chief concern for CFOs regarding the business situation, the survey explained. Four-fifths of those polled noted the domestic economy is not in strong shape for recovery, as well.

The top hurdle that executives said was holding them back was revenue growth, which nearly 60 percent noted, Deloitte explained. The second largest issue was creating a business strategy, which more than 40 percent reported, and this was approximately 10 percentage points higher than in the previous quarter. Talent was the third hurdle, as close to one-third reported this, which was actually down from the previous quarter.

Greg Dickinson, head of Deloitte's CFO Signals survey, added that many companies may start to have trouble thriving while the economy still struggles.

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