Deloitte survey: Weakened ME CFO optimism due to ongoing political uncertainties
3 December, 2013- The newly released edition of Deloitte’s Global CFO Signals report finds that Chief Financial Officers optimism during the third quarter of 2013 has weakened over the past year in the Middle East due to the ongoing political uncertainties; A net 41% of Middle East CFOs feel more optimistic about the prospects for their companies compared with a net 54% recorded 12 months ago.
The purpose of the Deloitte Global CFO Signals report is to provide highlights of recent CFO surveys results by Deloitte practices across the world. “The surveys, which were conducted in 17 countries and regions, illustrate that finance executives worldwide seem to be embracing recovery and setting their sights on expansion, despite continued economic hiccups”, reported James Babb, Deloitte Middle East CFO Program leader. He added: “The case of the Middle East is one of mixed optimism: while CFOs in the region reported improved expectations for revenues, capital spending, and hiring over the coming 12 months, the number reporting so is 38% less than a year ago, reflecting less confidence in their outlooks”.
“The sample of 156 Middle East respondents to the Q3 2013 Deloitte Middle Eastern CFO Survey expressed decreased optimism from the prior year, due in most part to the ongoing political uncertainties in the region,” elaborated Babb. “Although uncertainty has become a constant companion for many quarters now, the general feeling remains one of mixed optimism”.
Gulf countries reported relatively higher levels of optimism compared with the surrounding North African and Levant countries. Optimism among surveyed CFOs in Syria fell by 13%, while finance chiefs in the UAE reported a net 75% increase. Only a net 2% of CFOs reported their companies are carrying higher cash balances compared with a year ago, when a net 23% reported the same last year. While 75% of CFOs were predominantly concerned with market risk last year, that number has declined to 39%, with strategic, operational, and financial risks all becoming a prevalent concern, reflecting the general uncertainty in the environment.
Moreover, when asked about their companies’ business-continuity plans, one in four CFOs in the Middle East said they still did not have a plan in place despite the increased instability in the region. Middle East CFOs were also found to favor expansion in their own region over other parts of the world.
Highlights from the Q3 2013 Middle Eastern CFO Survey:
Focus on organic growth, cost reduction
Improved balance sheets
Facing continued uncertainty
To view the Global CFO Signals report, go to: http://bit.ly/19AgcJD