CFOs feelings improve
Deloitte’s latest CFO Sentiment report has found a high level of optimism.
Eighty-three per cent of CFOs in the survey covering the first half of this year reported being optimistic about the financial prospects of their companies.
A quarter of those surveyed said they were more optimistic than six months ago, up five percentage points on the previous poll.
But uncertainty does prevail, with 73 per cent of respondents identifying “above normal” to “very high” levels of uncertainty, a slight reduction on the record survey high of 78 per cent in the second half of last year.
“Both confidence and optimism continue to improve just as uncertainty becomes business as usual. And encouragingly, our CFOs remain comfortable in the face of the challenges uncertainty presents,” Deloitte CFO program leader Stephen Gustafson told News Corp reporters.
“Conditions are also promoting an appetite for more balance-sheet risk. Although this doesn’t mean CFOs aren’t cognisant of potential risks around the corner, but the share of those who think the time is right to take on more risk to drive growth continues to edge up towards 50 per cent.”
GPT Group CFO Anastasia Clarke, who participated in the survey, said the retail sector seems resilience despite some notable difficultites in the apparel space.
“In our shopping malls we have very high occupancy, a stable level of lease expiry and strong underlying income growth. The profitability of the retailers is improving well,’’ she said.
“We don’t have signals to us at the moment that would cause us concern and we think we will continue with strong shopping centre performance.’’
Ms Clarke said adjustments to the retail portfolio brought benefits.
“We are going to food, going to experiences, removing apparel without a point of difference and bringing in international retailers that do have a point of difference,” she said.
CFOs were also shown to have lowered their expectations for the local impacts of the surprise election of US President Donald Trump.
Two-thirds said they expected the Trump presidency to have no short-term effect on their business, while nearly 50 per cent expect the same to be the case over the longer term.
“Six months ago the worry and shock of Brexit and the upcoming Trump election was unnerving everybody,” Ms Clarke said.
“We have all moved past it. The world has taken it in its stride. There is not the level of shock there was back then and we are getting on with it.”