Confidence falls among Australian CFOs

Global economic uncertainty is affecting chief financial officers.

Australia’s financial heads have a far less rosy outlook than 12 months ago, according to Deloitte Australia’s CFO Survey Q4 2014.

Since the equivalent report last year, confidence levels have fallen to 6 per cent – the third consecutive quarter below double figures. About three in four of the chief financial officers surveyed also feel it is the wrong time to take on risk.

The downswing is being fuelled by financial market volatility, weaker commodity prices, continuing uncertainty over the passage of Australia’s federal budget and signs of a slowdown in China’s economy. 

“Business always needs to balance growth and risk, but we do appear to be struggling to find the right balance.”

“CFO net optimism regarding China was –46 per cent in Q4 2014, its lowest since Q2 2013,” says Keith Skinner, Deloitte Australia’s chief operating officer.

But there’s some cause for cheer with a falling exchange rate and abundance of available cheap debt. And CFOs indicate key drivers such as revenues, cash flows, discretionary spending and capital expenditure are in positive or stable territory.

Skinner says a focus is needed on how to shift mindsets, as overall caution kills the appetite for investment.

“Business always needs to balance growth and risk, but we do appear to be struggling to find the right balance.”

Source: CFO Survey Q4 2014, Deloitte Australia

This article is from the April 2015 issue of INTHEBLACK.

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