CFO survey: Economic moods in the Swiss economy are turbid
For the first time in more than three years, the economic forecasts for Swiss financial directors have decreased, according to the latest Deloitte study at the CFO. The reasons cited by the financial directors are the upcoming international tensions and respect for the appreciation of the Swiss franc.
For the first time in over three years, the economic sentiment among Swiss financial directors has deteriorated, according to the latest Deloitte CFO survey. 77% of over 100 financial directors surveyed in Germany are in favor of economic growth. This means a decrease of 8 percentage points compared to the first half of 2018. Deloitte notes that caution should be taken in the light of this depression in the future, because the last three similar mood swings have experienced a sharp drop twice.
The fact that the peak of growth seems to be exceeded is also evidenced by the fact that in the last three months there has been a significant drop in the optimism of financial directors in the financial perspectives of the company: the net balance (optimistic, less pessimistic) fell from 24% to 9%.
"The Swiss economy is still solid, but the big boom is over," said Michael Grampp, chief economist at Deloitte Switzerland, CFO survey results. Ongoing international trade disputes also colored Switzerland for the first time. The protectionist turmoil that emanates in particular from the two great powers, the US and China, is fueling the uncertainty of Swiss export-oriented companies, said Grampp.
Increasing political uncertainty among trading partners
40% of CFOs assess the high level of economic and financial uncertainty in this country. Perceived uncertainties are largely abroad. Almost half of export-oriented companies (48%) at the same time see large uncertainties.
Finance executives perceive the growing political uncertainty among traditional trading partners as major challenges. Compared to the first half of the year, risk perception increases dramatically compared to established US partners (plus 26% to 77%), Italy (plus 20% to 64%) and China (plus 15% to 30%). The UK is also considered a high-risk trading partner by high 64% of financial directors. Relations with two traditionally most important partners: Germany (11%) and France (7%) are perceived more positively. In both cases, the level of uncertainty in the first half of the year decreased.
As noted by Deloitte, France's external perception is also reflected in the appetite for the risk of French financial directors. The European CFO survey carried out by Deloitte shows that the French have shown the greatest readiness to accept a higher risk on the balance sheet: 45% now consider the time to be favorable. Switzerland is the second most vulnerable country behind France (39%). Although geopolitical uncertainty and protectionism are very important in the perception of risk by Swiss financial directors, the highest risk is perceived as internal, i.e. Domestic problems.
In the face of difficult international business, the emphasis is put on the CHF / EUR exchange rate for Swiss companies. For almost 60 percent of CFOs surveyed, a stronger franc would have a direct negative impact on their company. The average exchange rate is EUR / CHF at 1.07 as a pain threshold. It is surprising that, according to Deloitte, only slightly more than half of Swiss financial directors use risk assessments or financial collateral to limit exchange rate risk.
Skills shortage persists
Despite the deterioration of the economic outlook, companies are still focusing on spending all over Europe, both in terms of investment and recruitment: 39% of Swiss financial directors still expect capital expenditure to increase in a 12-month perspective. It puts you exactly in the European average. According to Deloitte, investment expectations have fallen sharply in Turkey and the United Kingdom, where political uncertainty is too high.
42% of Swiss finance directors are convinced that it will increase the number of employees over the next 12 months. However, they see access to qualified personnel as a growing risk. Almost without exception, they share these concerns with the financial directors of other European countries. In Germany and Austria, the lack of qualified employees is even the most frequently mentioned risk. People with appropriate technical knowledge and professional experience are especially sought after.