CFOs learn to love risk
Survey finds bullish outlook still building
AUSTRALIA’S finance chiefs are falling in love with risk again, according to a survey from Deloittes.
About 75 per cent of chief financial officers were optimistic about the financial prospects of their company and that confidence has been increasing since 2013.
Risk appetite was also strong with a record 64 per cent of CFOs comfortable with taking on more balance sheet risk, a rise of two points since last year.
About 42 per cent were interested in taking on risk in the form of additional investment if tax cuts are legislated.
Deloitte CFO program leader Steve Gustafson said the strong global economic conditions were flowing through to the Australian economy, and this was elevating CFO optimism.
“Just over 75 per cent are either optimistic or highly optimistic about the financial prospects of their companies and, encouragingly, a larger proportion – 21 per cent compared to 12 per cent six months ago – are at the highly optimistic end,’’ he said.
“Net optimism regarding change in prospects also jumped to 29 per cent, from 17 per cent in the second half of 2017.
“This may have been on the back of strong jobs growth in 2017, and while there has been some softening on this front since, the Australian economy has still added over 100,000 jobs up to June.
“And in a sign of confidence, many of these were fulltime, CBA chief economist Michael Blythe on the Australian manufacturing industry permanent additions to the workforce.”
While global and Australian economic conditions have given CFOs a future-looking green light, there is still a perception conditions could deteriorate quickly.
“CFOs are clearly optimistic, but still a little wary of something tipping the scales, and since ... the second half of 2017, net uncertainty has increased by 10 per cent,” Mr Gustafson said.
“CFOs expect strong economic conditions will continue to support share markets and investment, while a depreciating Australian dollar will improve the competitiveness of Australian exporters.”
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