The rate of net optimism improvement among CFOs has slowed significantly in the quarter. A net 6% of CFOs are more optimistic about their company’s financial prospects than they were 3 months ago(down from 36% in Q1)
This decline has been driven by an increase in federal policy uncertainty, the recent uptick in the value of the Australian dollar and continuing concerns over the multi-speed economy
The Federal Budget will have a negative impact on company’s growth prospects according to 38% of CFOs while 62% predict a negative impact on the growth prospects of the Australian economy
However, 54% of CFOs agree with the rate of fiscal repair embodied within the Federal Budget while 18% say it should be faster
Risk appetite of CFOs has fallen from the record highs of last quarter but 44% still believe now is a good time to take on more risk
Business metrics for the coming year remain strong with 68% net of CFOs expecting revenues to increase and a net 66% expect operating cash flows to rise
Credit remains cheap and available but internal funding is again more popular than bank borrowing, corporate debt or equity.
Not too bad, all things considered. Full report here.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
