Reduced interest rates, increased iron ore prices and economic growth in China have 70 per cent of CFOs feeling confident about revenue growth, with 63 per cent expecting an increase in cash flow this year, according to Deloitte’s latest Quarterly CFO Survey.
Deloitte surveyed 73 ASX300 CFOs between 11 December 2012 and 14 January 2013, and found a third were more positive about growth in their businesses and the economy compared to the last quarter.
“As the spike in heavy mining investment fades and the sector turns to the less capital intensive output phase, there will be more opportunities for the other 80 per cent of the economy to take a greater share of investment dollars,” Deloitte’s Chief Operating Officer, Keith Skinner, said.
Investments in new products, services and markets account for 56 per cent of CFOs’ growth strategies, with organic expansion at 70 per cent.
“We expect CFOs to move from the current holding pattern and adopt more proactive growth strategies. These might include increased capital expenditure and greater investment in business development activity,” Skinner said.
CFOs are also looking to improve productivity, with 85 per cent wanting to increase revenue from existing customers, 75 per cent wanting to move into new markets and 72 per cent wanting to invest more in training for employees.
However, the high value of the Australian dollar and uncertainty around government policy negatively impacted most CFOs’ confidence in the Australian economy, the survey found.
“The continued high value of the Australian dollar negatively impacted the confidence of 62 per cent up from 45 per cent last quarter,” Deloitte said.
“Lack of policy certainty continues to be a significant negative impact on the confidence levels of the majority (71 per cent) of CFOs this quarter. For the vast majority of CFOs the forthcoming election cannot come soon enough, they continue to be frustrated by the policy intransience of a hung parliament.”