Survey of Swedish CFOs Finds Tempered Optimism

A survey of Swedish chief financial officers (CFOs), conducted by Deloitte and Nordic bank SEB, notes that despite headwinds from a still weak Europe, the Swedish economy is on the rise for the first time since 2011.

The increase is strengthened by housing investment and expected private consumption, with the big difference being that Sweden’s manufacturing sector is “now pulling its weight”.

The latest survey, which is published twice a year and based on responses from a selection of CFOs at the 200 largest companies in Sweden, finds that they expect improved cash flows, increased investment and growth in 2015.

Employment increased in late 2014, and there are several signs that the upturn will continue during the H1 of 2015, although there is also considerable uncertainty. One in three Swedish companies claim that the political situation is affecting business negatively, and there is still uncertainty about macroeconomic development and its impact on order intake.

“Overall, firms are more optimistic about the immediate future, but that is likely due to an adjustment to, in many respects, a new reality rather than that fundamental factors have become more positive,” said Johan Lindgren, credit strategist at SEB. “However, CFOs predict strong organic growth in 2015, which is consistent with our GDP forecast.”

The survey suggests that improved cash flow along with increased focus on mergers and acquisitions (M&A), investment and geographical expansion should lead to new hires in 2015, even though the global economy and macroeconomic conditions remain uncertain. A higher M&A activity level in 2014 is expected to continue or even increase slightly this year.

“Despite a very strong financial position, good access to funding and bright prospects, repayment of debt and focus on cost reductions still remain top priorities for financial managers at larger companies, which is somewhat surprising,” said Tom Pernodd, partner at Deloitte.


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