A third of the country’s Chief Financial Officers (CFOs) are more optimistic compared to last quarter, according to the latest Deloitte Quarterly CFO Survey.

Falling interest rates, strong growth statistics out of China and the increased price of iron ore has driven the optimism of 73 ASX300 CFO’s who took part in the survey.

Deloitte’s Chief Operating Officer, Keith Skinner, “It seems most ASX300 CFOs have right sized their businesses, cleaned up their balance sheets and are adjusting to the new norm of a stronger Australian dollar (A$).”

“A solid 70% of CFOs expect to see positive revenue growth in the coming year and 63% expect an increase in cash-flow over the same period. These two key indicators have been steadily increasing over the past two quarters.”

Key findings of the survey include:

  • China - As Chinese economic growth starts to strengthen the percentage of CFOs who said their optimism was impacted by a Chinese slow down fell from 73% to 53% this quarter
  • A$ - The continued high value of the Australian dollar negatively impacted the confidence of 62% up from 45% last quarter
  • Interest rates - 56% of CFOs felt the positive effects of further reductions to interest rates on their optimism levels
  • Revenue – Six months ago half (51%) of CFOs expected positive revenue growth, this quarter there are 70% who believe their businesses revenue is going to improve
  • Cash flow - Operating cash flow was also expected to improve for 63% of respondents (56% in Q3, 29% in Q2) as CFOs continue to squeeze out incremental growth
  • Growth - Organic expansion (70%) and investing in new products, services and markets (56%) were the most popular growth strategies
  • Credit - Cost of credit continued to fall, the result of falling interest rates, to the lowest level since the survey began in 2009, with 23% describing credit as cheap or very cheap. The availability of credit has jumped with 60% reporting it as somewhat or very available and only 15% finding it hard to get
  • Recruitment – Approximately 30% of CFOs expected headcount to increase, offset however by a similar percentage who expect headcount to decrease