Deloitte CFO survey: Q3 2010

Uncertainty rises

cat's cradleWelcome to our fifth quarterly Deloitte survey of Chief Financial Officers of major Irish based companies. The survey was conducted in September 2010, and CFOs of listed companies, large private companies, and Irish subsidiaries of overseas multinational companies participated.

Key findings from this quarter’s survey:

Market risk is the biggest concern

  • 58% of respondents identify market risk as the most worrying risk. CFOs believe that continuing volatility and uncertainty surrounding consumer demand and confidence, commodity prices, interest rates, Budget 2011, and price pressures pose a considerable concern
  • CFOs continue to have more confidence in their own companies than the Irish economy as a whole with 41% saying their company has already returned to growth, whereas the majority are now indicating that it will be late 2011 or into 2012 before the economy returns to growth

Expectations of revenue and turnover still broadly positive

  • Almost 60% of CFOs are anticipating increases in turnover over the next six months, while 30% are projecting no change. Another positive finding is a fall in the number of CFOs predicting a decrease in turnover
  • A significant proportion (61%) of CFOs surveyed also anticipate improvements in profitability, again continuing the positive trends of previous quarters. Only 9% of respondents are anticipating a decrease in profitability. 
  • Revenue maintenance/growth (30%) and cost management (24%) remained the key financial challenges facing CFOs

Cost and availability of credit

  • Domestic banks remain the preferred source of funding (37%) despite the fact that the cost of debt is increasing and domestic bank funding remains difficult to get
  • The cost of credit remains on an upward trend with 50% of CFOs expecting market interest rates to increase over the next 6 months
  • In contrast, UK CFOs overwhelmingly see current interest rates as being at low levels, the lowest in fact since the UK CFO Survey started in Q3 2007. Corporate credit availability also rose at the fastest pace since Q3, 2007

Selective recruitment and high skills availability

  • Over half of respondents indicated that their companies are currently recruiting, however in many cases this is for very specific roles, rather than large scale increases in staff numbers
  • According to CFOs, the Irish labour market currently has a wide availability of resources who have an average or low salary expectation and are rated either high or average in quality, skills and experience
  • The most popular cost reduction measure undertaken by companies in recent years was a pay or overtime freeze. About one fifth of companies have already reversed these measures and approximately another quarter are planning to reverse them in the next six months 

Read the full PDF report here
Read the executive summary here
Read the full Deloitte CFO survey press release here.

Contact us

Shane Mohan

Shane Mohan, partner T + 353 1 417 2543

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