Financial Executives Predict "Double Dip" Recession, Do Not Expect Recovery Until Q2 2010 or Later
Quarterly Poll by Adaptive Planning and BPM Forum Shows CFOs Are Increasingly Re-Planning Due to Ongoing Economic Uncertainty
MOUNTAIN VIEW, CA--(Marketwire - October 26, 2009) - Nearly half of financial professionals
think that the economy is headed for another downturn, 74 percent expect
the recovery will begin in Q2 2010 or later, and well over a third expect
further employment cuts over the next six months. Economic uncertainty
continues to be high, leading 34 percent of companies to re-forecast on a
monthly or more frequent basis, the highest reading of the past year. These
striking observations and predictions are among the findings of a poll of
financial executives conducted in September and October by Adaptive
Planning and the Business Performance Management (BPM) Forum.
The Q3 2009 Business Volatility and Variables Survey revealed that 46
percent predict a "W-shaped" recovery. Combined with the large majority
that predict a recovery to begin in Q2 2010 or beyond, this suggests a
widespread expectation that a second downturn will occur over the next two
quarters. Fifty-seven percent are facing high or very high levels of
uncertainty in their business, up from 45 percent last quarter.
On the positive side, 25 percent of respondents said conditions are better
now than they were six months ago, compared to just 15 percent who said so
last quarter. However, a full 75 percent said current conditions are the
same (33 percent) or worse (42 percent) than they were six months ago.
While nearly half (47 percent) expect conditions to improve within the next
six months, this is nearly the same as last quarter (48 percent),
suggesting that despite recent signs of recovery, respondents are no more
optimistic now than they were in Q2.
Companies continue to underperform relative to their plans, with a
surprising 61 percent coming in under revenue targets this quarter,
slightly worse than 56 percent from last quarter. This was offset somewhat
by 46 percent that came in under expense targets, which was essentially
unchanged from last quarter (47 percent).
As they look forward, financial professionals expect improvements in
revenues and profits, with 46 percent expecting revenue growth over the
next six months, and 33 percent predicting profit margin growth in that
period. However, the employment picture has deteriorated, with those
projecting additional hiring decreasing relative to last quarter (14
percent versus 21 percent), and those expecting further personnel
reductions increasing (39 percent versus 32 percent last quarter). 47
percent of larger companies, with over 100 employees, expect additional
headcount reductions.
The frequency of re-planning activity rose to the highest level since the
survey began in Q4 2008, with 34% re-planning or creating "what-if"
analyses three or more times in the last quarter, nearly 2.5 times the rate
reported in Q4 2008 when the downturn first became apparent. 60% expect
that the uncertain economic environment will cause them to re-plan,
re-forecast, and perform what-if analyses even more frequently in the next
quarter, up from 50% in the last survey.
"In contrast to some recent positive signs in the stock market and
corporate earnings announcements, we were surprised that there wasn't more
optimism in this quarter's survey data," said William A. Soward, CEO of
Adaptive Planning. "The performance versus plan numbers, increased
frequency of re-planning and re-forecasting, and heightened interest in
what-if analyses all point to the fact that financial professionals
continue to face significant challenges in planning for and managing
through uncertainty."
The online poll surveyed financial professionals from companies in over
twenty industries and ranging in size from under $10 million to over $1
billion in revenues, with 54 percent categorized as midsized or large
companies (more than 100 employees). This is the fourth quarterly poll
examining perspectives on key economic conditions, individual company
performance, and the role of planning and forecasting in the current
economic downturn.
The poll will be conducted once per quarter and the results tallied against
those of previous quarters to identify trends in overall economic
conditions and planning practices. For more information on the summary
report of the findings, visit
http://www.adaptiveplanning.com/docs/Business_Volatility_and_Variables_Poll_Q3_2009_FINAL.pdf.
In a separate announcement, Adaptive Planning announced today a new
"QuickStart" (http://www.adaptiveplanning.com/news/news_press_releases.php)
bundle to make it easier and more affordable to transition from
spreadsheets to Adaptive Planning, by combining user-based subscriptions
with key training and implementation services, for an attractive price.
About the BPM Forum
The Business Performance Management (BPM) Forum is dedicated to advancing
performance accountability, process improvement, operational visibility and
compliance in global organizations. It provides support to thousands of
senior executives and practitioners representing enterprises with more than
$500 billion in combined annual revenues. The BPM Forum's C-level members
engage in research, thought leadership, and knowledge exchange programs
around a variety of strategic issues and challenges. More information is
available at: www.BPMForum.org.
About Adaptive Planning
Adaptive Planning is the worldwide leader in on-demand financial planning
and reporting solutions that improve operational efficiency, strengthen
companywide collaboration, and drive better business decisions in companies
of all sizes. Adaptive Planning makes it easy to move beyond spreadsheets
and automate budgeting, forecasting, reporting, and "what-if" analysis,
without the cost and complexity associated with traditional business
intelligence and BPM software. With free software, free trials, and both
on-demand and on-premise deployment options, Adaptive Planning is the
fastest and easiest way for finance organizations to enhance their agility
and strategic value. Adaptive Planning is headquartered in Mountain View,
Calif. and can be reached at 650-528-7500 or www.adaptiveplanning.com.
Contact Information: Media Contacts:
Mark DiCello
GlobalFluency
650-433-4161
Greg Schneider
Adaptive Planning
650-810-0525