Confidence returning for Australian CFOs

The majority of Australian CFOs are more optimistic about the prospects for their company now than they were a quarter ago, and are also more willing to take on risks, according to Deloitte.

Around 54% of the respondents to the company's latest CFO quarterly survey said their confidence in their business had improved in the last three months.

Four in five CFOs also believe their company's operating cash flow will increase over the next 12 months.

And for the first time in four quarters, a majority of 52% believe now is a good time to take increased financial risks onto their balance sheets.

These risks translate to spending, with 61% saying they were planning to increase capital expenditure this year, and just over a quarter planning to increase capex by over 20% in 2011 compared to the prior year.

“Despite a number of shocks at home and abroad, CFOs are enjoying a period of good performance and this is contributing to increased confidence and a renewed appetite for risk,” Deloitte COO Keith Skinner said.

M&A activity is also expected to increase – a slim majority of CFOs said they were likely to pursue deals in the next year. But organic growth will still be the main focus.

A third of CFOs expect the RBA to raise rates in the September quarter, while 24% expect the next rise to occur in Q4.

While 84% of respondents believe the government introducing a price on carbon would make Australia less competitive globally, only 52% have predicted a negative impact to their own company's financial performance.