Press releases

Deloitte CFO Survey Q3 2015

European confidence heads south, Belgian performance keeps up

Deloitte Belgium publishes the results of its Belgian CFO Survey and the first European CFO Survey, covering the third quarter of 2015. Southern and peripheral countries are Europe’s most optimistic. In Belgium, performance is good despite the unclear future.

Diegem, 24 November 2015 – Deloitte Belgium announces the results of two complimentary studies on current business attitudes: the Belgian quarterly CFO Survey and Deloitte’s European CFO Survey. Both reports polled CFOs during the third quarter of 2015. European CFOs report dampened spirits linked to global economic weakness and geopolitical instability, although those in countries in the south and on the periphery express more optimism. Despite the uncertainty, meanwhile, Belgian CFOs saw good performance in the third quarter and their enthusiasm for risk keeps up.

Falling business confidence in the north

The biannual report collates the results of surveys run by Deloitte member firms in 15 European countries: Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Russia, Spain, Switzerland and the United Kingdom. Analysis of the views of 1,298 chief financial officers (CFOs) shows their business optimism and risk appetite have fallen. Only 25% say they are more optimistic now about the financial prospects for their company than they were three-to-six months ago, down from 33% in the first quarter of 2015. Those saying they are less optimistic rose from 18% in Q1 to 23% in Q3.

Yet surprisingly, Europe’s southern and peripheral countries report higher levels of optimism than in the north. For example, 58% of Ireland’s CFOs express growing optimism, while a high proportion of CFOs in Spain (54%), Poland (50%) and Portugal (47%) are also more optimistic.

Risk appetite falls, uncertainty rises

“Worries about external risks have weakened business sentiment and fed through to a reduction in CFO risk appetite in most countries,” said Michael Grampp, European CFO Survey Lead. Indeed, just 33% of CFOs say now is a good time to take risk onto their balance sheets, down from 38% in Q1. Risk appetite is highest in Italy (56%), followed by Ireland (48%), the UK and Spain (both 47%). Appetite for risk is lowest in Norway and Germany (both 20%), followed by the Netherlands (21%) France and Austria (both 22%). Belgium is in the middle with 40%.

This correlates with rising CFO uncertainty: 66% see a high level of financial and economic uncertainty facing their businesses, up from 60% in Q1. Unease is highest in Germany (87%), the Netherlands (84%) and Switzerland (75%), but much lower in Norway (22%), Poland (36%) and Ireland (39%). The increasing uncertainty, say CFOs, is linked to global economic weakness, geopolitical instability and financial market and currency weakness, even in countries where sentiment remains strong.

Coping through cost control

How are these lower expectations being managed? “Against a backdrop of continuing global economic uncertainty, European CFOs are strongly focused on controlling costs,” Michael Grampp explained. In 12 out of 15 countries including Belgium respondents put cost reduction and control among their top three priorities, with seven countries citing it as number one. This holds true even in countries such as Italy, Ireland and Portugal with high levels of optimism and risk appetite. “Almost two years into the euro area recovery, this focus on costs testifies to the uncertainties and risks still facing Europe’s CFOs,” observed Michael Gramp.

Mixed reaction to summer Greek crisis

When asked if recent events in Greece damaged the prospects for Europe achieving a stable and closely integrated European monetary union in the longer term, on average 48% of CFOs say yes. But looking deeper, opinions diverge. The figures range from 40% in Eurozone countries to 63% in non-euro countries. Survey respondants in the euro area’s three largest economies are even more optimistic about the future of the single currency bloc. Only 23% of French CFOs, 38% of Italian CFOs and 41% of German CFOs believe the Greece crisis will have a negative effect.

The full European CFO survey results

Belgium: good performance amid the haze

Looking at the past two years of data from Deloitte Belgium’s quarterly CFO Survey, overall enthusiasm has trended downwards and the third quarter is no exception. Any clear optimism has slowly faded in the haze of concerns about the pace of global recovery and the impact of a Chinese slowdown. Size seems to matter. CFOs of smaller organisations show significantly less optimism than those of the large organisations.

“Performance to budget remained strong overall in the third quarter,” said Deloitte Partner Thierry Van Schoubroeck, who heads the CFO Survey team. This is especially true for large organisations, 80% of which report that third-quarter financials are on budget, with 40% outperforming the budget. By contrast, 50% of smaller organisations surveyed did not meet their budgets at the end of the third quarter, and only 24% surpassed them.

Healthy appetite for risk

Yet the changing mood has not changed business priorities. Although optimism has eroded, it is noteworthy that risk appetite in Belgium has stayed high and focus on expansionary strategies is up. Fully 40% of CFOs think now is a good time to take additional risk onto their balance sheets. “This is close to the highest level we’ve seen since the start of the survey in 2009,” remarked Thierry Van Schoubroeck.

Despite signals from Central Bankers that record low interest rates might not continue for long, CFOs do not expect significant increases. Only half expect a (small) increase in interest rates in the coming six months. “Funding is available and all major forms of financing are attractive to our respondents,” concluded Thierry Van Schoubroeck.

The full Belgian CFO survey results

Communication contact

Sophie De Meyer
Deloitte Belgium
+32 2 600 60 21

Download het persbericht

Téléchargez le communiqué de presse

Did you find this useful?