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CFO Sentiment Report | Edition 14

CFOs hold firm as risks grow

CFOs hold firm as risks grow

Business confidence among Australian CFOs remains steady, but they are also wary about an uncertain Australian economic outlook dominated by inflation and interest rates rise.

According to the latest edition of Deloitte’s biannual CFO Sentiment survey, a net 66% of CFOs are feeling optimistic about the current financial prospects of their company as 2022 draws to a close. The result is similar to the first half of 2022 although challenges in the economic environment mean they are much less confident about the Australian economy.

The survey also found that cyber risks and ESG considerations are top of mind for CFOs as they look ahead to what happens over the next six months with intense interest.

Other key findings (from the survey conducted in mid-late October) include:

  • A net -22% of CFOs are optimistic about the Australian economy, in stark contrast to optimism about the financial prospects of their company
  • 92% rate uncertainty levels as higher than normal, up slightly from six months ago, and close to an all-time high for the survey since it began in 2009
  • Only 20% of CFOs think now is a good time to take on risk – down from 58% at the end of 2021
  • 32% say their business had encountered at least one cyber security incident in the last 12 months, and less than half agree that their organisation is prepared to manage a significant cyber incident46% of CFOs reported that their organisations are taking ESG action because it is the right thing to do but they are having to balance ESG investment decisions against competing priorities and external pressures.

Deloitte partner, and CFO Program leader, Stephen Gustafson, said: “CFOs appear to be in two minds. Optimism is holding on the back of its recovery in the first half of 2022 despite back-to-back declines during COVID lockdowns in late 2021 and emerging inflation earlier this year. But confidence about the economy is in very low territory.

“Securing and retaining key talent, inflation and the threat of a global economic recession round out the top three risks identified, while data and cyber security capabilities have emerged as more pressing issues, rising to now be a top four risk of most concern.”

Business confidence remains steady, yet CFOs are wary about Australia's economic outlook
Risk or threats for a cyber incident
Drivers of ESG action
Security & retaining key talent remains the top risk for CFOs for the 4th survey in a row
Balance sheet risk and uncertainty about economic and financial conditions
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