Business environment outlook
Central Europe CFO Survey 2018
How are costs for companies likely to change over the next 12 months? Do CFOs expect normal or higher country-level uncertainty? Will interest rate increases impact strategies? Is this a good time to be taking greater risk? Which factors are likely to pose a significant risk to business?
- The concerns that many CFOs have about external uncertainty at both a country and a company level are preventing many from taking more risk onto the balance sheet.
- CFOs’ chief worries relate to their ability to attract highly skilled employees and manage an overall increase in the costs of doing business.
The majority of CFOs do not think 2018 will be a good time for companies to take on more risk; this was the view of 69% of respondents (up by 4 pp from last year). Latvia is the only country surveyed where the majority of CFOs believe the conditions will be favourable for taking riskier financial decisions in 2018. CFOs in Romania and Slovenia are the most risk-averse, with over 80% thinking that 2018 will not be a good time to take more risk.
Workforce and production costs
Regardless of industry, CFOs expect increases across most cost categories in 2018. The main exceptions are tax-related costs and provisions for bad debt, which are predicted to remain stable. A stand-out observation is that 91% of respondents think workforce costs will be higher in 2018 than now. In addition, more than three-quarters of CFOs expect overall production/delivery and transportation costs to increase next year.
CFOs from two industries stand out in anticipating higher costs: the Business and Professional Services industry, in the area of workforce costs; and the Life Sciences industry, relating to overall production costs.
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- M&A transactions
- Strategies that would be most appropriate for business
- Different sources of funding