“The macro environment in spring 2023 is still characterised by high inflation and historically high energy prices, but also by a half-year with rapidly rising interest rates. Even though the economy is still facing strong headwinds, knowledge about the situation is better and a number of risks have ebbed, which is making it easier for companies to glimpse the future. This is leading to favourable business opportunities and financial outlooks,” says Marcus Widén, economist at SEB.
The share of CFOs who see business opportunities as being advantageous during the coming six months increased in the spring CFO Survey to 41 per cent, from 38 per cent last autumn. The share who see the future as being less favourable also increased, to 23 percent, compared with 17 per cent last autumn. This means that the indicator, or net balance between those who have a positive view and those who have a negative view, has fallen to 18 from 20 last autumn. Even though most responses indicate a positive view, a more negative view of the situation for the consumer products sector had an impact, making the overall sentiment somewhat more negative. However, the financial outlook indicator rose and is now at minus 12 per cent, compared with minus 29 per cent last autumn.
“The headwind is blowing the hardest against households, and the fact that companies that deal with consumers have a pessimistic view of the future is therefore not particularly surprising. However, owing to the large number of companies in that sector, it has impacted the net score at the same time as CFOs in many other sectors view the situation as being normal or average,” says Robert Bergström, partner at Deloitte.
Priorities and risks
Organic growth is the top priority among CFOs, compared with cost-cutting, which had the top priority last autumn. Forty-nine per cent of CFOs cited organic growth as a priority. This was followed by cost-cutting and measures to improve cash flow.
With respect to risks, 49 per cent of CFOs feel that economic growth poses a significant risk in the coming 12 months. This makes it the most significant risk, even though it is the one that has also decreased the most. Weak domestic demand and pressure on prices and margins were the second and third top risks cited.
Changed strategies
The spring survey also included questions about changed strategies in the light of the supply chain problems that arose during the pandemic. In response to the question of what measures companies are taking, the use of digital planning tools was most prominent, followed by stress tests and diversification of suppliers. The survey also shows that having a larger share of local sourcing and increasing inventory levels have decreased considerably.
About the survey
The CFO Survey was conducted in February and March 2023 and is based on a number of questions that were presented to and answered by selected participants via a web-based questionnaire. The CFOs who participated in the survey represent a cross-section of major Swedish companies from various sectors.
Access the full survey here: www.cfosurvey.se