CFO Survey 2017
Positive expectations of Chief Financial Officers
The economic expectations of Chief Financial Officers (CFOs) have undergone a change for the better over the last 12 months, and the CFOs are looking at the outlook for their companies with considerable optimism.
However, they do have some major concerns about the health of the overall business environment, with forthcoming changes in economic and tax law, downwards pressure on prices and the impact of Brexit all contributing to a widespread unwillingness to take business risks.
- Overall CFO’s are somewhat optimistic about GDP growth in 2017. Although only 7% expect growth of more than 2.5%, 55% expect growth between 1.5 and 2.5%.
- 61% of CFOs expect their company revenues to grow during 2017 but only 17% expect operating margins to improve or stay the same, and 44% expect their workforce to grow.
- The level of economic uncertainty doubled from last year, with 28% of respondents rating the business environment as highly uncertain.
The report is divided into four main chapters, on the economic outlook, the business environment, company growth prospects and the role of the CFO. Key findings in each chapter include:
Confidence in growth remains high…
CFOs across the region anticipate economic growth in 2017, with 62% anticipating increases in GDP of more than 1.5% which is a little less than in 2016. Employment prospects remain about the same.
Despite concerns about workforce mobility and trade barriers, opinions are less pessimistic (22%) regarding the impact of Brexit than respondents in other CEE countries and even the whole Eurozone.
…despite uncertainty about the business environment
It is widely recognised that the business environment is somewhat unstable, with 28% of respondents calling the level of uncertainly “high or very high”.
Cost increases are widely expected, with CFOs anticipating more expensive workforce (95% of respondents), production (73%), real estate (52%) and business-related services (46%).
Difficulty in attracting suitably qualified employees and downward pressure on prices are seen as the biggest risks businesses face in 2017, while worries about increasingly stringent tax and financial laws have implications for future profitability.
The company growth outlook is positive but…
40% of CFOs are bullish about their companies’ financial position in 2017, with 22% expecting theirs to worsen during the year. It is a significant decrease compared to 2016 when the growth outlook exceeded 60%. Thus, there is no sign of over-confidence affecting financial prudence.
How CFOs see themselves…
For the first time, this year’s Deloitte Central Europe CFO survey included a section on how respondents see their own roles – in particular, which are the most important aspects of their jobs. Containing quotes from some of the region’s most prominent CFOs, this clearly shows that responsibilities associated with managing company finances are still their key priority. Others, including overseeing company processes, team management and representing the business are important but not mission critical.
According to Deloitte’s Partner Martin Tesař, who leads the CFO programme in the Czech Republic:
This year’s report gives an overall picture of the region with strong economic prospects. An important topic for business managers will be attracting sufficient qualified labour accompanied by pressure on wage growth, which was one of the key reasons for growing production costs. Since we have been closely monitoring the opinions of CFOs for almost a decade, it will be interesting in early 2018 to see how the views and predictions of our respondents have stood the test of time.
About the study
This annual questionnaire tracks the latest thinking and actions of CFOs representing the largest and most influential companies. It explores top-tier CFO issues across five areas:
- business environment,
- company priorities and expectations,
- finance priorities,
- CFO role.
The findings discussed in this report represent the opinions of 115 CFOs based in the Czech Republic.