Chief financial officers from some of Australia’s largest companies are already watching their spending as they predict the domestic economy factor will restrict their company’s growth in the next year.
This is among the key findings from the latest American Express/CFO Research Global Business and Spending Monitor, an annual global survey exploring the attitudes and sentiment of senior finance executives from companies with revenues exceeding $500 million.
“The research supported what many of our large corporate customers are telling us,” said Christine Wakefield, vice president and general manager, American Express Global Corporate Payments.
“Many are anticipating headwinds for the local economy and are taking a more measured approach to their spending as a result.”
The survey reveals Australian CFOs have the highest levels of concern regarding the domestic economy compared to their regional counterparts in China (23%), Hong Kong (11%), Japan (10%) and India (7%).
Six in ten Australian CFOs expect only a modest economic expansion during the next year, with a quarter anticipating a flat or declining economy. Only 13% of CFOs anticipate substantial economic expansion, down 9% on 2013 figures.
Reflective of local economic concerns, two-thirds of Australian CFOs say their company’s spending and investment levels during the next year will be either moderate or tightly controlled. Most predict an annual uplift of 10%.
Only 7% of CFOs said spending and investment would increase by 20% or more, down from 26% of CFOs last year.
“Our research shows Australian CFOs are more concerned about the domestic economy and how it will impact their organisations than they are about the availability of capital or changes in regulatory, statutory, or accounting requirements,” says Christine Wakefield.
Last year’s change of government, a slowing of Australia’s mining boom, waning consumer confidence and the continued relatively strong Australian dollar taking a toll on exporters, are among the factors driving this concern.
The survey shows nearly half (45%) of companies will invest less on developing new products and services compared to last year. Instead, their top three investment priorities in terms of business goals are:
- Pursuing business transformation and innovation (70%)
- Remaining competitive with other companies (66%)
- Entering new markets (62%)
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.