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Optimism levels among Australian CFOs have made a significant comeback in the first quarter of 2015, according to Deloitte's latest CFO survey.
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CFO optimism surging, says Deloitte
23 April 2015
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The survey shows a net 21 per cent of CFOs surveyed have a more positive attitude toward the prospects of their companies than they did three months ago and are more prepared to take on financial risk.
The results indicate a lower Australian dollar and record-low interest rates appear to be the main drivers of the shift in sentiment.
“Genuine CFO optimism has returned,” said Deloitte Assurance and Advisory partner Stephen Gustafson.
“It hasn’t reached the levels of a year ago, but it’s a very significant improvement on what was a subdued mood for much of 2014,” he added.
“This is great news, and the underlying story appears to be the Australian dollar falling 15 per cent in the last six months to below the US$0.80 mark, and interest rates at record lows, and possibly heading lower still.
“The dollar in particular appears to be the silver lining to the dark cloud of the slowing resources sector. While over 40 per cent of CFOs feel that declining commodity prices have had a negative impact on optimism, the impact of a lower dollar is clearly a positive for many corporates operating outside mining, oil and gas.”
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Seventy-four per cent of respondent CFOs cited the value of the Australian dollar as a positive influence on their optimism, and 57 per cent cited low interest rates.
In contrast, federal government policy and leadership uncertainty, as well as the slowing Chinese economy, continue to weigh on optimism.
“Policy uncertainty, budget repair, leadership instability, and hesitation regarding the reform agenda continue to have an impact on business confidence, and were a negative factor for a net 55 per cent of CFOs,” Mr Gustafson said.
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