Aussie CFO sentiment surges to decade high

Deloitte has released its 10th biannual CFO Sentiment survey covering the second half of 2020.

The survey shows that CFO sentiment has surged to a decade high on the back of the economy’s “V-shaped” recovery, including the strong rebound in employment and decade high consumer confidence.

72% of CFOs are now feeling optimistic or highly optimistic about the financial prospects of their companies, whereas more than half (53%) are willing to take more risk onto their balance sheets.

62% of CFOs are now optimistic about their financial prospects relative to six months prior, representing the sharpest lift in confidence over a single six-month period on record:

However, Australia’s CFOs continue to express high levels of uncertainty about external financial and economic conditions. At the end of 2020, 87% of CFOs reported higher than normal uncertainty, down only slightly from 92% six months prior.

Record low borrowing costs, combined with strong economic momentum, has driven up sentiment despite the highly uncertain environment.

Overall, the fact that more than half (53%) of Australia’s CFOs surveyed are planning to take on more risk and expand their balance sheets is a good sign for the economy, since it portends a rebound in business investment, which for years has been a drag on Australia’s growth (see green line below).

Nearly all signs are pointing to a V-Shaped recovery for the Australian economy.

Unconventional Economist
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