CFO’s get gloomy on China

The quarterly Deloitte CFO survey is out today and shows what a depressed lot our key money-men are right now:

CFOs’ net optimism has fallen to its lowest level since the survey began, following three consecutive quarters of positive growth

• The slowdown in China has had the biggest negative impact on CFOs’ optimism, edging out the previous front-runner, Australian Government policy uncertainty, which continues to have a significant negative impact

• Appetite for risk has dipped again; only a quarter of CFOs believe now is a good time to take risk onto the balance sheet

• More than half of the CFOs surveyed showed renewed interest in M&A, while organic growth remains the leading business strategy for the year ahead
• Expectations for the value of the Australian dollar have shifted significantly; half of the respondents expected it to fall beneath US$0.90, compared to zero who expressed the same expectation in the last survey
• More than half of CFOs said the depreciation of the Australian dollar had improved their company’s financial prospects while the majority agreed that it improved Australia’s global competitiveness

• Views on interest rates shifted significantly; two-thirds of CFOs expected rates to fall further below 2.75%, compared to 8% who predicted this in the last quarter
• While the upcoming Federal election is impacting business confidence, it was generally not seen as a reason for deferring capital expenditure, acquisitions, divestments or hiring

• CFOs reported that credit is cheaper and more available now than any other time in recent years, but companies continue to be cautious in their approach to gearing.

Credit, credit everywhere but not a drop to drink…

Deloitte CFO Survey Q22013 Web by David Smith