Swedish CFOs’ Uncertainties Remain, But Signs of Increasing Optimism are Emerging

A survey of chief financial officers (CFOs) by Deloitte/SEB confirms that Sweden clearly has been drawn into the international economic downturn. The survey shows that CFO expectations remain at a low level, even if they have improved marginally compared to the previous survey in November 2011. It is primarily the companies’ financial position and banks’ willingness to lend that are causing concern among CFOs. The Swedish CFO index value increased only marginally to 50.5 in February from 49.2 in November.

“The survey confirms the weak business climate in Sweden, even though it has improved somewhat since November in line with recent macroeconomic data. The strong Swedish krona can prove to be a challenge for Swedish export companies, as the survey responses show that CFOs in general have budgeted for a weaker krona for 2012 than the current level,” said Disa Hammar, credit analyst at SEB, and senior analyst Ebba Lindahl, co-authors of the report.

“The fact that Swedish banks are affected by tougher regulations in the wake of the financial crisis is evident in the responses to several questions. Swedish CFOs believe that their company’s financial position has weakened and that banks’ willingness to lend remains low by historical standards. Meanwhile, access to capital has emerged as a new cause of concern and the number of M&A [merger and acquisition] transactions is below the five year average. To pay down debt also remains a top priority for CFOs in the event of a cash surplus,” said Lindahl.

Continued Redundancies in Sweden

“Recruitment plans remain modest among Swedish CFOs, who expect a net reduction in the number of employees in Sweden. For employment abroad however, the outlook is slightly brighter. Thirty-five percent expect to reduce the number of employees in Sweden, while 20% plan to increase staffing. When it comes to recruitment abroad, 18% expect to reduce staffing, while 33% say they will increase the number of employees,” said Hammar.

The purpose of this survey is to reflect changes of sentiment in the financial environment and facilitate the understanding of economic and financial trends. The survey comprises a total of 12 questions covering areas such as business climate, strategic investments, employment, views on currencies and interest rates, financial strength, and lending attitudes among financial institutions.


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