Swiss finance chiefs fear economic downturn
Published: Tuesday, Oct 31st 2023, 06:40
Updated At: Wednesday, Nov 1st 2023, 00:55
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A pronounced economic downturn is currently the number one concern of Swiss CFOs. According to a CFO survey by the consulting firm Deloitte, this is followed by labor shortages and inflation.
After Swiss CFOs were still reasonably optimistic about the expected economic trend in the spring, this positive attitude has now faded. According to the survey of 131 Swiss CFOs published on Tuesday, 22 percent expect the economy to slow down, although 41 percent still anticipate continued economic growth. In spring, however, the corresponding figures were still 8 and 57 percent respectively.
Expectations for trading partners Germany (65% negative or very negative) and China (65% negative or very negative) are far more pessimistic than for Switzerland. In the case of the USA, Switzerland's most important export destination, the CFOs surveyed are cautiously more positive (41% positive or very positive), but here too the positive outlook has declined significantly.
In addition to the gloomier economic outlook for the economy as a whole, companies are also taking a more negative view of their own development, according to the survey. Although half of those surveyed are optimistic about the future of their company, this is a decline from the spring, when over 60 percent still rated the company's outlook as positive. According to the survey, cost management is the clear priority for the next six months.
The labor shortage also remains high on the list of concerns, although there was no change here compared with the last survey. Concerns about persistent inflation remain in third place in the survey, although price increases have weakened recently. CFOs' inflation expectations are also declining: In two years, they expect inflation to reach 1.7 percent, down from 2.2 percent in the spring.
Cyber security increasingly in focus again
Meanwhile, Swiss CFOs are once again focusing on cyber security. For the first time since 2021, it is again among the top 10 risks for companies, according to the survey. This rise in priority is due to the ever-increasing number of cyberattacks on companies, which often have serious consequences for business operations and result in ransom demands and extortion attempts.
It is also interesting to note that the CFOs surveyed attribute a sharp decline in importance to geopolitical risks in the survey compared with the spring. However, the survey was conducted in September, i.e. before the Hamas attack on Israel.
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