Invest
How do CFOs feel about COVID-19?
Chief financial officers nationwide have painted a very uncertain picture of corporate Australia at the present time, with domestic economic woes a leading cause for their concern.
How do CFOs feel about COVID-19?
Chief financial officers nationwide have painted a very uncertain picture of corporate Australia at the present time, with domestic economic woes a leading cause for their concern.
The latest edition of Deloitte’s CFO Sentiment survey has revealed record-high levels of net uncertainty about economic conditions, with optimism also falling to negative numbers.
The trend downwards comes after what appeared to be “a positive turning point for business sentiment” in the second half of 2019, according to Deloitte partner and CFO program leader Stephen Gustafson.
He said, “When we surveyed Australian CFOs earlier this year, and covering the second half of 2019, we identified what looked like a positive turning point for business sentiment.”
“Not surprisingly, things have changed more than a little since,” Mr Gustafson continued.
“A COVID-induced global economic downturn, the largest since the great depression, has hit hard, net optimism has fallen drastically, and uncertainty is at an all-time high.”
He highlighted that three out of four CFOs expect their companies’ revenues to fall, relative to pre-COVID-19 forecasts, in the second half of 2020, and more than half are expecting more revenue falls in 2021.
According to the newest report, despite the turmoil from increasing infection rates and foreign economic conditions the world over, it’s the domestic economic hit that’s having the most negative impact on CFO confidence.
“Fiscal measures have been key to supporting the economy over recent months, with JobKeeper and JobSeeker payments providing much needed income to workers in affected sectors,” the report outlined.
Despite such stimulus, “Australia’s economy will also be hurt by a series of delayed and lingering effects as pre-COVID pipelines of activity dry up and fiscal support tapers off.”
According to the report, unemployment will not peak until later in the year, while it won’t return to previous levels until at least 2024.
In addition, strict border controls will continue to hamper tourism, international education and population growth.
The volatility from the Australian sharemarket is not helping the cause.
But Mr Gustafson was quick to acknowledge that while “reality may have bitten, and so much uncertainty is clearly taking a toll”, many businesses are not yet “pulling down the shutters”.
According to the CFOs surveyed, there are still opportunities to be found, both now and in a post-COVID-19 world.
This is if they can navigate the three main issues raised in a COVID-19-ravaged environment: The abundance of uncertainty, accelerated transformation and the need to cut costs from operating margins.
There’s plenty of optimism around tackling such challenges: More than one in three CFOs have already increased the number of deals their company pursues in order to grow and diversify through acquisitions, opportunistic deals and partnerships or alliances.
One-third (32 per cent) also believe access to funding will become even easier – with Deloitte calling it “good news for liquidity”.
About the author
About the author
Economy
Markets react to Biden’s stimulus package
The US markets have reacted negatively to President-elect Joe Biden’s US$1.9 trillion ($2.44 trillion) bailout proposal, amid mass job losses as the US continues to struggle with the COVID-19 pandem...Read more
Economy
‘Aussies to keep economy ticking with $200bn in savings’
The government is counting on Aussies to use their savings to drive economic recovery once temporary support measures are wound back at the end of March. ...Read more
Economy
Business improves but COVID threat remains
The Australian economy continues to show signs of life, with businesses’ payment times improving despite recent outbreaks of COVID-19, new research has revealed. ...Read more
Economy
10 impacts the US ‘blue wave’ will have on investors
With the US Senate run-off falling to the Democrats, a new blue wave is spurring optimism for investors, a chief strategist has said. ...Read more
Economy
Frydenberg confident vaccine rollout will boost the economy
The economy and the budget are expected to reap the benefits of the earlier than planned vaccine rollout, following a series of unexpected lockdowns which have already put a dent on the government’s...Read more
Economy
Australian economy back to pre-COVID levels by 2021
The Australian economy is expected to bounce back to pre-COVID levels by the end of 2021 as wins on the health front and aggressive government policy have limited damage while boosting business and co...Read more
Economy
Economy to recover from weakest year since WWII
The global economy is expected to recover in 2021 following the weakest year since World War II, with fiscal and monetary policy continuing to support world economies, a big four bank has forecasted. ...Read more
Economy
‘Lagging the world’: Australia’s fintechs grew despite lack of incentives
Australia’s fintech sector continues to grow, despite the challenges of the COVID-19 recession, new research has shown. ...Read more
Economy
Markets react to Biden’s stimulus package
The US markets have reacted negatively to President-elect Joe Biden’s US$1.9 trillion ($2.44 trillion) bailout proposal, amid mass job losses as the US continues to struggle with the COVID-19 pandem...Read more
Economy
‘Aussies to keep economy ticking with $200bn in savings’
The government is counting on Aussies to use their savings to drive economic recovery once temporary support measures are wound back at the end of March. ...Read more
Economy
Business improves but COVID threat remains
The Australian economy continues to show signs of life, with businesses’ payment times improving despite recent outbreaks of COVID-19, new research has revealed. ...Read more
Economy
10 impacts the US ‘blue wave’ will have on investors
With the US Senate run-off falling to the Democrats, a new blue wave is spurring optimism for investors, a chief strategist has said. ...Read more
Economy
Frydenberg confident vaccine rollout will boost the economy
The economy and the budget are expected to reap the benefits of the earlier than planned vaccine rollout, following a series of unexpected lockdowns which have already put a dent on the government’s...Read more
Economy
Australian economy back to pre-COVID levels by 2021
The Australian economy is expected to bounce back to pre-COVID levels by the end of 2021 as wins on the health front and aggressive government policy have limited damage while boosting business and co...Read more
Economy
Economy to recover from weakest year since WWII
The global economy is expected to recover in 2021 following the weakest year since World War II, with fiscal and monetary policy continuing to support world economies, a big four bank has forecasted. ...Read more
Economy
‘Lagging the world’: Australia’s fintechs grew despite lack of incentives
Australia’s fintech sector continues to grow, despite the challenges of the COVID-19 recession, new research has shown. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
