CFO Sentiment Report | Edition 15
Economic reality kicks in
CFO Sentiment: confidence under pressure as Australia's economic reality kicks in
Australia’s weak economic outlook continues to weigh on corporate CFO sentiment, but could improve over 2024 as conditions stabilise, supported by strong population growth and easing inflation.
When last surveyed just over six months ago, CFOs appeared to be in two minds. Optimism around business performance was holding, but confidence about the economy was already low – now, however, pessimism is now seeping into expectations about their own business performance.
Positively, optimists still outnumber pessimists, but net optimism on business performance has fallen, a lower rate than at the start of the pandemic.
The outlook for many key business metrics still remains in positive territory. On balance, CFOs still expect capital expenditure, employment and revenue to increase in FY24, although expectations have weakened somewhat, and they are turning their attention to cost control as a top priority to manage any bottom line the impacts.
Other key CFO Sentiment findings include:
- 50% of CFOs remain optimistic about their company's financial performance, down from 72% six months ago - and 21% are now pessimistic.
- 85% rate uncertainty as higher than normal, down from 92%.
- Only 24% think now is a good time to take on risk – up on the 20% six months ago, but still down compared to the end of 2021.
- CFOs still expect business spending and hiring to increase in FY24, although around 25% now expect this to decrease in the next 12 months, compared to around 8% six months ago.
- 75% report cost control as a top focus area.
The survey report also again looks at ESG considerations for CFOs as well as their climate priorities and challenges.
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