Survey Shows Optimism among Swedish CFOs

Optimism among Swedish financial chiefs continues to rise, the business environment is improved and financial positions have strengthened significantly since autumn 2013, according to the latest survey by Deloitte and Swedish financial group SEB.

The survey shows Swedish chief financial officers’ (CFO) views on the business climate, financial positions, access to financing and key operational risks. Results are based on responses from CFOs at Sweden’s 200 largest companies.

Overall, the latest CFO survey is more positive than the previous survey from September. Continued uncertainties over demand, along with concern over higher interest rates, currently worry CFOs most.

“All factors are actually in some degree positive. We see that companies generally have good financial footing and are positioning themselves for increased investment in both factories and personnel. This means they plan to increase production within the next year,” says Johan Lindgren, credit strategist at SEB.

When asked directly, half of the surveyed CFOs say they are considering increasing capacity utilisation and production plans within the next 12 months.

Despite justified concern over emerging markets, CFOs foresee an overall increase in production and capacity utilisation. CFOs also look a little more favourably on new investment and increased merger and acquisition (M&A) activity, albeit from low levels. Improvement is also evident in willingness to hire new employees over the next year.

Nearly 90% of respondents believe that access to finance is very good, which is the highest proportion in many years. After relatively sharp stock market increases recently, there are signals of over-valuation in comparison to fundamentals.

“Companies have now been operating amid a prolonged period of economic uncertainty. We note that there are now relatively few storm clouds on the horizon for Swedish financial chiefs,” said Tom Pernodd, partner at Deloitte.

“However, we can expect cautious growth and expansion initiatives against the backdrop of companies still prioritising low debt and strong financial positions. This positive outlook is also largely shared by CFOs around Europe and the US, based on recent studies there.”

The survey was conducted in February and featured a total of 15 questions in areas including business climate, strategic investments, labour, the outlook for currencies and interest rates, financial strength, and attitudes towards lending to banks and financial institutions. CFOs at some of Sweden’s largest companies responded. The full report is available at www.sebgroup.compress and www.deloitte.se.

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