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Business environment outlook
Central Europe CFO Survey
The business environment remains uncertain and is not encouraging firms to take risks. Many CFOs are concerned about forthcoming changes in economic law and tax law that may have a negative impact on their company bottom lines.
CFOs feel the downward market pressure on the price of the goods and services they offer will be one of the most important factors to affect their businesses. The shortage of qualified workers continues to be the biggest challenge facing companies in the Business & Professional Services, Technology, Media, Telecommunications and Consumer Business sectors. This shortage is being caused by an ongoing shift towards an employee's market, making it difficult to attract specialists in certain fields.
The risks outlined by participating CFOs translate into concerns about rising costs, particularly workforce and production costs. Despite being worried about the changes in tax law, most CFOs do not expect taxes to rise. They are more concerned about increasingly stringent regulation and the challenges that this can cause.
Internal financing continues to be the most feasible source of capital for companies. While most CFOs also spoke positively about other financing sources, such as corporate debt and equity, they did not necessarily consider these to be the best solutions for their own companies. The perceived feasibility of a given financial instrument is largely dependent on the sector within which a given company operates. For example, equity was rated highly by CFOs in the Technology, Media, Telecommunications sector, but received little support from the CFOs of finance companies. CFOs also like the idea of EU funds, but admit that they are not a source of financing that their companies would take advantage of. CFOs in the Public Sector are the exception here, as a large proportion of EU support is targeted at public institutions.
Much like last year, participating CFOs expect the M&A market to continue growing.