The chief financial officers from some of Australia’s largest companies are heralding some positive signs leading into next month’s Federal Budget.
They see strong revenue ahead, plus export expansion and they believe the economy will positively contribute to company growth.
However, the CFOs also report a 20% year-on-year decline in plans for aggressive investment for 2015 and little in the way of hiring new staff.
The findings are from the eighth annual American Express/CFO Research Global Business and Spending Monitor, an annual global survey exploring attitudes and sentiment of senior finance executives from companies with revenues exceeding $US500 million. In Australia, 31 CFOs did the survey.
While there had been some loosening of purse strings since the GFC, spending intentions over the next 12 months reflect caution.
Australia was the second most reluctant market in the Asia Pacific region to aggressively invest this year, behind Hong Kong.
Half of Australian CFOs say their level of investment over the next 12 months will stay flat or increase by less than 10% and another 3% say their investment will decrease.
“At a time when the government is looking to big business to help drive the economy forward, this research shows more needs to be done to give CFOs the confidence to spend,” says Christine Wakefield, Vice President of American Express global corporate payments.
Of surprise was the number of CFOs not willing to increase investment to achieve crucial business goals. These included improving market capitalisation (42%), remaining competitive with other companies (35%), pursuing business transformation and innovation (32%) and better meeting customers’ needs (32%).
The majority of CFOs surveyed said that for fundamental business activities they are likely to invest at the same level as last year or less.
Recruitment to support business growth is also not a top priority for three-quarters of those surveyed. Instead, the focus is on training employees and acquiring specialised skills to fill niche positions.
“Companies are looking for ways to do more with less and stretch every dollar further,” says Wakefield. “Yet with competition increasing and innovation needed to drive organisations into the future, it’s vital Australian big business doesn’t pull back excessively and forego long-term returns.
“With our dollar performing weakly against the US Dollar, now especially is a great time for exporters.”