The CFOs of Australia's major listed companies have suddenly lost confidence

The Bund in Shanghai. ChinaFotoPress/Getty Images

Chief financial officers of Australia’s big ASX-listed companies have suddenly lost their optimistic outlook.

Deloitte’s latest CFO Survey, covering the September quarter, identified the shift in sentiment on the back of concerns about China and despite the positive influences of low interest rates and a falling dollar.

Only 5% of the finance chiefs reported that confidence levels had increased compared to 24% in the second quarter and 21% in the March quarter.

The CFO Survey observed a distinct swing away from rising optimism, as this chart shows:

“Commodity prices continue to weigh on CFO optimism amid rising supply and falling demand from China, the world’s biggest commodity consumer,” says Deloitte managing partner Dennis Krallis.

Two-thirds (68%) reported that news from China was a negative influence on optimism, the most downcast response since early 2013 when China had released its worst growth figures in nearly 15 years.

“Similarly, our share market has continued its sharp fall from a net positive influence, to starkly negative, broadly reflecting recent ASX movements,” says Krallis.

“But it’s important to note that there are also confidence boosters. Low interest rates, a weak dollar and the change in leadership in Canberra, with the widely held perception that the new-look government is more open to tax reform and innovative policy, have all helped to temper the China impact.”

The Deloitte CFO Survey, which has been run since the third quarter of 2009, targets the CFOs of major Australian listed companies.

This time 22 CFOs were surveyed. They represented businesses with a combined market value of $174 billion or 10.10% of the Australian quoted equity market.

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