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New Gov boosts confidence of Irish CFOs

New Gov boosts confidence of Irish CFOs

New Gov boosts confidence of Irish CFOs

More than three quarters of chief financial officers at Irish firms believe the new coalition government will have a positive impact on international confidence in the Irish economy, according to a new survey released today.

The Deloitte Q1 2011 CFO Survey found that the majority of CFOs in Ireland believe the new Fine Gael/Labour government will be good for public sector and political reform, job creation and fiscal policy.

However, CFOs remain sceptical on the effect the new Cabinet will have on the cost of credit, levels of taxation and the availability of credit to small businesses.

Public sector reform, cost cutting and job creation are the three most pressing measures the government should focus on, according to the financial officers questioned in the survey.

Respondents to the survey were also asked about their own companies and their sentiments toward their financial prospects.

Some 62pc of respondents believe that their company has already returned to growth or will have returned to growth by the end of 2011. 

However, only one in four said revenues will increase in the next six months, down from 46pc in the last three months of 2010.

The number of CFOs who believe profitability will increase has dropped by 8pc to 32pc, likely reflecting higher oil prices and interest rates, said Deloitte.

In general, the survey found that most CFOs are more confident in the abilities of their own companies than that of the overall economy. The survey’s authors said this could be a reflection that many of the companies surveyed are benefitting from the buoyancy of export markets.

Growing revenues and maintaining profit margins are the top two financial challenges facing CFOs currently.

Cost management has returned as a top-three challenge despite last quarter's results that suggested this was no longer a major focus for CFOs.

Oil prices and maintaining costs is now a big headache for many financial officers.

In fact, 43pc of CFOs believe rising oil prices will force an increase in the prices their companies charge for goods and services over the period, while 31pc indicated that they have already passed on the increase.

Almost half of respondents said they are taking measures to reduce their company's exposure to fluctuating oil prices.