Q2 CFO Survey: Businesses Taking Hits But Optimism Rebounds

Michiana Benchmark Business Index (BBI), is produced by the certified public accounting and consulting firm of Kruggel Lawton CPAs using data independently collected from CFOs and senior-level financial officers of major businesses and corporations in Indiana and Michigan.

In the second quarter of 2020, the overall BBI  recovered slightly after a precipitous drop in the 1^st quarter of this year.  The overall 2^nd quarter BBI was 41.38 out of a maximum possible score of 100, an increase of just over 1% from the prior quarter results. 

2020 Q2 Michiana Benchmark Business Index findings:

• Revenues Declined: The Revenue metric decreased 26 percent from the 1st quarter of 2020. Of the participating CFOs, 36 percent reported their companies’ revenues declined by 20 percent or more from the same quarter in 2019
• Profit Reduced: Profitability was also adversely affected, with a 17 percent decrease in this metric from the prior quarter. 44 percent of CFOs reported that of those submitting data reported their companies’ profitability was lower by 20 percent or more compared to the 2nd quarter of 2019.
• Employment Stabilized: The Employment metric stabilized after a healthy decline in the 1st quarter; it increased nearly 3 percent in the 2nd quarter
• Outlook Improved: In a sizable reversal from the 1st quarter of this year, CFOs’ perception of the economic and business outlook (“CFO Outlook”) for their companies increased 49 percent for the 2nd quarter

There seems no question that the COVID-19 pandemic continues to dramatically impact many businesses in the South Bend/Elkhart and southwest Michigan region. According to the survey results, 2nd quarter revenue and profitability took big hits, although it’s encouraging to see employment levels stabilize. The significant turnaround in CFO optimism is particularly encouraging, which we hope portends a turnaround and strengthening of private-sector businesses in our region.

Kruggel Lawton conducts this confidential survey of CFOs in for-profit companies in the South Bend/Elkhart region on a quarterly basis. The survey tracks changes in companies’ revenue, profitability, and employment levels compared to the same quarter of the prior year, along with CFOs’ perception of the business outlook for their companies. Participating CFOs’ input on these four metrics is combined into the overall Benchmark Business Index to provide a barometer of the regional business climate.

If you are a CFO in a Michiana area for-profit organization and would like to participate in this survey, please contact Terry Bush at tbush@klcpas.com or call 574-289-4011, ext. 205.

With office locations in South Bend, Elkhart, and Goshen Ind., St. Joseph, Mich., and Knoxville, Tenn., Kruggel Lawton CPAs is a full-service accounting and business consulting firm offering assurance services, tax consulting, estate planning, business valuation, and business accounting services. Kruggel Lawton also has national and international capabilities as an independent member of the BDO Alliance USA.