Most CFOs confident about 2022
Over 80% of Australia’s chief financial officers (CFOs) are feeling optimistic about the prospects for their company over the next 12 months but 95% believe uncertainty is higher than normal, according to Deloitte.
According to the latest edition of Deloitte’s biannual CFO Sentiment survey, confidence overall was down slightly compared to six months ago, but nearly 25% of CFOs were still feeling highly optimistic as they looked to emerge from the COVID-related challenges of the last two years.
Net optimism from CFOs about the financial prospects of their companies was at a strong 79% while 58% believed now was a good time to take on increased balance sheet risk.
Deloitte partner, and CFO program leader, Stephen Gustafson, said: “In August last year we said that, in the midst of this global pandemic and such uncertain times, positive levels of CFO sentiment, and resilience generally, were really encouraging. Pleasingly, this remains the case.
“Australia might be off to a shaky Omicron-induced start to 2022, meaning uncertainty remains a challenge for all of us, and, perhaps not surprising, nearly all CFOs surveyed believe uncertainty levels are higher than normal.
“But against this backdrop, there’s next to no pessimism around. The fact that nearly 25% of our CFOs are highly optimistic and 58% are optimistic, is such a positive result when the global economic downturn of 2020 caused by COVID hit CFO optimism hard.”
Almost three quarters expected interest rates to rise in 2022 while about nine in 10 said securing and retaining key talent was one of their key risks for the next 12 months.
Gustafson said: “On the risk front, there is widespread concern about talent. This was a concern six months ago, but these concerns now dwarf concerns about other risks. Businesses will certainly need to get innovative in 2022 as they seek new ways to attract and retain top talent.
“Another significant risk assessment is of an economic slowdown for China, perhaps not surprising given the state of Australia-China relations, and uncertainty levels being at an all-time high.
“Yet 58% of CFOs still think now is a good time to take more risk onto their balance sheets. This is likely supported by record-low interest rates, albeit now on the rise, but also shows that CFOs continue to adapt to the uncertain environment business is operating in.”
AUTHOR
Liam Cormican
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