Financial officers’ confidence in their firms slides as euro crisis drags on

Business confidence has fallen in Ireland with only one in five Irish chief financial officers now optimistic about their company’s financial future as the euro crisis drags on.

The findings of the Deloitte survey of chief financial officers on the second quarter of 2012 showed their confidence down more than 10% in the second quarter of the year.

Despite this, 51% of CFOs expect turnover to have increased in the next six months, down slightly from 53% last quarter. Some 46% also expect profitability to rise within six months.

Regarding the Irish economy, 92% of respondents do not believe the economy will return to growth before Q1, 2013. Regarding the eurozone, 37% believe a break-up of the eurozone is likely, while 38% do not.

Deloitte partner Shane Mohan said that the decline in confidence is as a result of volatility in the wider European markets: “Optimism is likely to ebb and flow among Irish chief financial officers as work continues within the EU to bring stability, and as markets react to new developments. However, as we have seen in previous quarters, chief financial officers are maintaining confidence in the ability of their own companies in terms of profitability and turnover, two key financial measures. In a marketplace that is continually changing and faced with challenges, this is very encouraging indeed.”

The CFO survey also looked at cost and availability of credit. Some 81% of Irish CFOs believe credit is costly. This contrasted poorly with other European neighbours. In the Netherlands, 57% believe credit is cheap while 50% of Swiss had access to cheap credit.

In terms of availability of credit, 50% of Irish said it was hard to get, compared to 16% in Switzerland and 9% in Germany.