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Dampened mood among Swiss CFOs
Zurich, 27 October 2014
Weakening economic figures from at home and abroad, coupled with geopolitical crises, are causing Swiss finance directors to take a less rosy view of the future. This is the key finding of the 21st Deloitte survey of Swiss CFOs.
A slowing Swiss economic activity, sluggish recovery in Europe and global political hotspots are all making an impact. At just 26%, only one quarter of Swiss CFOs currently rate the financial outlook for their company as positive. This is the lowest figure in the last two years, as the Deloitte CFO Survey shows.
Around half of the 120 CFOs surveyed (53%) have an optimistic view of the economic outlook in Switzerland. This represents a decline of 22 percentage points, as optimists accounted for 75% of the total in the last quarter. The share of finance directors who take neither a positive nor a negative view of the economy has risen from 23% to 38%.
“For the first time in around two years, Swiss CFOs are taking a more critical line on the future,” explains Michael Grampp, chief economist at Deloitte in Switzerland. “Besides the economic figures, the current military conflicts are causing concern, with geopolitical risks clearly outweighing economic risks in the CFOs’ risk assessments.”
70% concerned about geopolitical risks
The geopolitical tensions in a number of regions including East Asia, the Middle East and Eastern Europe (Ukraine-Russia) have worsened since the start of the year. 70% view this as a significant company risk. Almost half (48%) of the companies surveyed by Deloitte believe that these tensions were having a direct negative effect on their company. Michael Grampp adds: “Alongside the conflict in Eastern Europe, concerns about the potential impact of the Ebola epidemic on things like the global supply chain are also increasing right now.”
Stable exchange rate – thanks to the National Bank
Swiss finance directors envisage the exchange rate remaining stable at 1.22 Swiss francs to the euro over the next 12 months. Furthermore, 50% expect the Swiss National Bank (SNB) to maintain the currency floor for at least two more years. In the hypothetical case of the SNB abandoning the minimum rate tomorrow, only 17% believe that the euro would still be worth 1.20 or more in 12 months time.
Michael Grampp emphasizes: “The Swiss National Bank still has an absolutely key role to play in stabilizing the markets. Although the current exchange rate is still a challenge, most companies have now become accustomed to it. A rate of 1.20 francs to the euro is considered neither an advantage nor a disadvantage by 81% of respondents.”
About the Deloitte CFO Survey
Each quarter, Deloitte Switzerland conducts a survey of chief financial officers (CFO) and finance directors. 120 CFOs took part in the 21st survey, which was carried out at the end of the third quarter of 2014. They represent both listed companies and large private companies from all relevant industries/segments. Deloitte DTTL conducts similar CFO surveys in a further 20 countries.
You will find the full results to download here.
About Deloitte in Switzerland
Deloitte is a leading accounting and consulting company in Switzerland and provides industry-specific services in the areas of audit, tax, consulting and corporate finance. With approximately 1,300 employees at six locations in Basel, Berne, Geneva, Lausanne, Lugano and Zurich (headquarters), Deloitte serves companies and institutions of all legal forms and sizes in all industry sectors. Deloitte AG is a subsidiary of Deloitte LLP, the UK member firm of Deloitte Touche Tohmatsu Limited (DTTL). DTTL member firms comprise of approximately 210,000 employees in more than 150 countries around the world.
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