Business confidence registers ‘very significant improvement’

Conducted over the first quarter of 2015, the survey showed that a net 21 per cent of CFOs have a more positive attitude about the prospects of their companies.

That compared to a net result of six per cent from the previous quarter.

The survey also found that 51 per cent believe that now is a good time to take on financial risk – up 24 percentage points from the previous quarter.

Gearing intentions increased from a net result of -17 per cent last quarter to a net result of +15 per cent this quarter.

Deloitte assurance and advisory partner Stephen Gustafson said that while CFO optimism hasn’t reached the levels of a year ago, it’s a “very significant improvement on what was a subdued mood for much of 2014”.

“While risk aversion and an overall sense of caution had been recurring themes for much of 2014, net optimism has grown since, from six per cent in the fourth quarter of last year to 21 per cent in the first quarter of 2015,” he said.

Mr Gustafson noted that though the lower Australian dollar and interest rates have driven a rise in CFO confidence, concerns remain around federal government policy.

“Policy uncertainty, budget repair, leadership instability and hesitation regarding the reform agenda continue to have an impact on business confidence, and were a negative factor for net 55 per cent of CFOs,” he said.

Despite this, Mr Gustafson said it hasn’t overly dampened business spirits.

“This again suggests that Australia may have arrived at an economic tipping point where, despite this uncertainty, underlying conditions are positive enough that CFOs are willing to take on risk and invest in growth,” he said.