CFO Sentiment Report | Edition 17
Emerging from the storm
CFO Sentiment offers a compelling view of Australia’s business landscape through the eyes of its financial leaders.
Australia’s chief financial officers (CFOs) are at a turning point. For the first time in three years, we’re seeing a meaningful boost in optimism for the year ahead.
Featuring insights from a comprehensive survey of senior finance executives, our latest CFO Sentiment report reveals two-thirds of CFOs feel optimistic about their company’s financial prospects, while views of Australia’s economic outlook are notably less pessimistic.
CFOs aren’t out of the woods just yet: the jury’s out on when interest rates will fall, risk appetite remains low, and the inflation fight isn’t over.
But after two years of trepidation and uncertainty, CFOs are beginning to see a glass half full. Productivity and cost control are top of mind, and there’s growing belief in the transformational power of generative AI.
Explore highlights from this edition in the graphics below and download the full report for detailed insights and analysis.
CFO sentiment at a turning point
The tide is turning on CFO optimism despite lingering weakness throughout the economy. Net optimism about business prospects has increased by 29 percentage points since H2 2023 – the first notable rise since late 2021. This improvement follows a period of high inflation, interest rate rises, talent shortages, and weaker demand.
Conditions may still be weak in the here and now, but resilient CFOs are staring ahead and feeling notably better for the first time in three years.
Where to from here on interest rates?
One big question dwells on the minds of CFOs: when will the RBA start to cut rates? After 2023 saw confidence squeezed by the impact of higher interest rates and inflation, business sentiment around the outlook for these measures has greatly improved in early 2024. Now, nearly half (48%) of surveyed CFOs expect rates to be unchanged in a year, while 45% expect they will be lower.
Productivity remains front and centre
More CFOs are optimistic about the future and are taking action to prioritise productivity improvement in the year ahead.
While nearly all CFOs are exploring how they can improve or automate processes within their finance functions, interest in AI and its benefits are undeniable. Some 50% of CFOs are already using AI to improve productivity, and a further 34% plan to start. This is the largest “in progress (early stages)” response of all productivity measures.
CFOs bullish on the internal and external impacts of gen AI
Gen AI is revolutionising the workplace, and CFOs are taking notice. In just six months, they've become far more bullish about its potential impact: the share of CFOs who believe gen AI will substantially transform their industry within 5 years rose from 57% to 78%. It’s clear the mood is shifting and shifting quickly, but less so on finance. This may be due to regulatory constraints and complex decision-making processes around finance function activities.
