BUSINESS confidence is up, with most Australian chief financial officers saying the global financial crisis is over, a survey shows.
BUSINESS confidence is up, with most Australian chief financial officers saying the global financial crisis is over, a survey shows.
However, the Deloitte CFO survey has found not all businesses are ready to exploit the impending turnaround in the economy, with 28 per cent of respondents saying their sentiment has remained broadly unchanged since the last quarter.
It shows Australia’s CFOs are optimistic about future prospects and see the financial outlook for their companies reflecting an “unexpectedly shallow economic downturn” and the speed and strength of the rebound.
A total of 88 per cent of CFOs believe the worst of the credit crunch is over for their company, while 72 per cent are more optimistic about their company’s outlook than they were last quarter.
The survey found 61 per cent of CFOs anticipate economic recovery in the latter half of 2010.
While acknowledging economic improvements are just around the corner, 28 per cent of those surveyed said they were still in wait-and-see mode.
“They expect business conditions to remain difficult through the early stages of recovery and their plans still reflect plenty of caution,” the Deloitte report said.
“A significant number of CFOs are uncertain that the recent economic improvements will quickly flow through to corporate earnings.
“In the past 12 months, CFOs have largely focused on business fundamentals.
“They have minimised risk, managed cash flow and cut costs.”
There was a marked difference of opinion in corporate Australia about the availability of credit, with 43 per cent of CFOs saying credit was somewhat available while 42 per cent said credit was somewhat hard to get.
Just under a quarter of CFOs plan to reduce their level of gearing over the next 12 months, while just over a third said they were ready to increase gearing levels.
Meanwhile, a banking survey has found that small to medium enterprises are sticking with the safety of the big four banks, which have increased their share in the deposit market.
The latest East & Partners Australian SME Banking Markets Report shows that the primary market share for the big four banks in small business term cash deposits has increased by more than 16 per cent in just the past year, to 72 per cent.
The secondary market for deposits is also shrinking, with only 40 per cent of businesses placing their term deposits with more than one bank, down from 60 per cent one year ago.
“In the current climate, SMEs are turning to deposits as a safe investment vehicle, while banks are seeking to gain deposits to firm up their balance sheet”, East & Partners financial markets analyst, Peter Drennan, said.
