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Increased optimism among CFOs amid ongoing concern over geopolitical risks, new Deloitte research finds

  • 29% of CFOs believe this is a good time to take greater risk onto their company’s balance sheet, nearly double compared to this time last year, with anticipated interest rate cuts likely to contribute  
  • Nearly three-quarters of CFOs predict revenues will rise in the next 12 months
  • Shortage of skilled professionals is third biggest risk facing CFOs
  • Almost two in five CFOs say they expect employee numbers to increase

07 June 2024. Over half (60%) of Chief Financial Officers (CFOs) say they are more optimistic about the financial prospects of their company than they were three months ago, new research finds.

The figure has almost doubled year-on-year as only 33% of CFOs reported being more optimistic when asked the same question last year.

The findings are contained in the first 2024 release of Deloitte’s Ireland CFO Survey. The report shows that CFOs anticipate improvements in key metrics in the next year, with three-quarters of respondents (74%) saying their company’s revenues are likely to increase in the next 12 months – up from 57% in Spring 2023.

More than half (53%) predict their operating margins will increase in the next year.

Almost two in five of the CFOs surveyed (39%) said their employee numbers would increase in the next 12 months with 34% saying there will no change to staff numbers and 26% anticipating a decrease.

This level of optimism comes despite 53% of CFOs stating that there is a high level of external financial and economic uncertainty facing their business – a figure that is up from 44% in Spring 2023.

Geopolitics cited as top risk for CFOs and shortage of skilled professionals remains a concern

Geopolitical risk is cited by CFOs as the number one factor likely to pose a significant risk to their business over the next 12 months.

This is followed by economic outlook/growth, while a shortage of skilled professionals and reduction in domestic or foreign demand were jointly ranked in third place.

Asked to choose the most likely geopolitical risks to their business, 85% of CFOs said increased ransomware and cyber-attacks. This is followed by an expansion of Russia’s invasion of Ukraine (71%), an escalation of war in the Middle East (69%), unpredictable inflation surges (66%) and increased protectionism in global trade (53%).  

While geopolitical risk is of most concern to CFOs, 47% said they relied on
addressing such issues as they arise when surveyed on how they monitor and
manage this risk factor. Just 18% said they develop contingency plans for specific geopolitical events while 87% said they stay informed by monitoring political and economic news. 

Commenting, Danny Gaffney, partner, Consulting said: 

As the economy begins to stabilise and interest rates begin to return to more
normalised levels, it is not surprising that economic outlook has fallen down
CFOs’ lists of concerns. While geopolitical risks are seen as the top concern,
the majority do not see the potential impact from geopolitical risks being as
high as other ones such as cyberattacks. This may change over the coming six
months with the geopolitical environment likely to continue being uncertain with a year of elections ahead of us, with European elections in Ireland today and the UK next month.

A shortage of skilled professionals continues to be a top concern for CFOs. As financial leaders navigate the challenges and opportunities that lie ahead, retaining and attracting employees with essential skills will need to continue to be a priority for businesses, in particular as the majority in this survey see their
employee numbers increasing in the next 12 months.

Lower levels of inflation are expected but uncertainty still high

CFOs predict the inflation rate as recorded in the Consumer Price Index (CPI) will be 3% in Ireland and in the Euro-area over the next 12 months. This is a drop from this time last year, where CFOs thought it would be 6.4% for Ireland and 6.8% for the Euro-area.

Commenting, Gaffney said: 

Our figures show that there is still uncertainty amongst CFOs. However, there are positive trends emerging, such as an anticipated growth in revenue and an increasing number saying it’s a good time to take a greater risk onto their balance sheet. The interest rate cut announced by the European Central Bank yesterday will likely contribute to this positive direction.

CFOs have more responsibility

CFOs report to having seen their roles change in the last five years, with more than half having increased responsibility for ESG (66%), strategy and business development (66%), risk management (63%), and company-wide data governance (53%).

Commenting, Gaffney said: 

Change isn’t new for CFOs, but this group is experiencing change at an exponential pace as organisations look more and more to the CFO for support planning for the future. Becoming a leader who can thrive in uncertainty and plan for the long-term will be crucial, and may include mutually supporting changes to technologies, ways of working, relationships, and mindsets.


About the Deloitte European CFO Survey 

Deloitte has conducted the European CFO Survey since 2015, giving voice to senior financial executives from across Europe. The data for this edition was collected in March and April 2024 and reflects responses from 1,333 CFOs in 13 countries (Austria, Denmark, Germany, Iceland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom). This includes 38 CFOs working in large organisations in Ireland, ranging in revenue size from less than €100 million euro to over €1 billion euro.