CFO Sentiment: Holding firm in a crisis
CFOs’ optimism in the Australian economy has collapsed, yet confidence in their own companies remains relatively resilient.
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Yesterday’s National Accounts numbers highlight the headwinds facing Australian businesses and the economy. Real Gross Domestic Product rose by just 0.3% in the March 2026 quarter – the slowest rate of quarterly growth in a year. This was driven by subdued household spending and a reduction in net exports.
With these numbers only capturing the first month of the Middle East conflict, conditions are expected to worsen before they get better. Australian Chief Financial Officers (CFOs) recognise the challenges the economy is facing and have re-adjusted their expectations for the year ahead.
According to Deloitte's latest CFO Sentiment report, CFOs’ net optimism in the economy has collapsed to a record low of -36% in the first half of 2026, falling 58-percentage points over the past six months. This deterioration reflects the impact of the Middle East conflict and elevated inflation: 86% of CFOs expect the conflict to negatively impact the Australian economy while all believe that inflation will remain above the Reserve Bank of Australia’s 2-3% target range over the year ahead. As a result, net uncertainty has spiked to 93%—just two percentage points below the record set in the second half of 2021.
Although sentiment about the economy is weak, CFOs’ confidence in their own companies is relatively resilient. While net optimism has fallen to 50% (down 13 percentage points), the drop has not translated into significantly more pessimism, which actually edged down two points to 8%. Instead, respondents have largely moved into the neutral camp which has doubled from 17% to 34%. This signals that CFOs are approaching the year ahead with caution rather than alarm, keeping a close watch on the Middle East and how the developing conflict might affect their business operations
Interestingly, the gap in sentiment between economy and own company is larger in Australia than other countries in the Asia-Pacific region, according to Deloitte’s inaugural Asia Pacific CFO Pulse. This suggests that Australian CFOs are experienced at navigating economic uncertainty and are increasingly decoupling their business outlook from broader economic conditions.
Australian CFOs are responding to the Middle East conflict and energy supply risks with near-term, reversible measures. Cost control is the standout priority, cited by 56% of CFOs, followed by monitoring developments (40%) and liquidity and cash management (34%). Supply chain diversification and structural trade responses rank near the bottom despite directly targeting external risk, suggesting businesses are preserving flexibility rather than committing to major strategic shifts.
In terms of investment, firms are looking to shift their AI strategy from adoption to scaling. AI is emerging as a practical way to reduce costs through efficiency gains. But while 90% of CFOs report at least some AI use, turning that into enterprise-wide value remains the bigger challenge. Only 37% of CFOs say their AI spend is meeting or exceeding expectations, with nearly half either reporting no impact so far or saying the return is unclear or hard to quantify. For finance functions, talent and skills gaps (64%) and data-related issues (62%) remain the main barriers to AI adoption. A year ago, only 34% of CFOs identified talent as a constraint, suggesting that as AI ambitions have grown, so has recognition that the capability needed to deliver them is in short supply.
This newsletter was distributed on 5th June 2026 . For any questions/comments on this week's newsletter, please contact our authors:
This blog was co-authored by Ben Chamberlain (Graduate Economist, Deloitte Access Economics)
Click on the links below to read our previous Weekly Economic Briefings:
- 2026-27 Federal Budget: A step forward, but short of ambition(15 May 2026)
- Licence to stall – reforming occupational entry regulations could boost productivity growth (22 Apr 2026)
- Fuel uncertainty: oil price scenarios (13 Apr 2026)
- Deloitte Access Economics’ Business Outlook: Running on empty (31 Mar 2026)
