Swiss CFOs much more optimistic despite global uncertainty

The uncertain outcome of the US elections in November between Donald Trump and Joe Biden are a concern for Swiss business leaders KEYSTONE/Copyright 2024 The Associated Press. All rights reserved.

Chief financial officers (CFOs) in Switzerland are more optimistic about the near future than they were six months ago. Their main concerns are geopolitical uncertainty and the important trading partners Germany and China.

More than half (56%) of over 120 CFOs of Swiss companies surveyed expect the economy to develop positively over the next 12 months, according to the semi-annual CFO survey published on Wednesday by consulting firm Deloitte. This is 15 percentage points more than last autumn.

Around 38% of survey participants also rate expectations for Switzerland as neutral and 6% as negative. According to Deloitte, the outlook is therefore “solidly positive, but not euphoric”. CFOs are even more confident about the economy in the US.

By contrast, expectations for trading partners Germany (66% negative or very negative) and China (47% negative or very negative) are far more pessimistic than for Switzerland and the US. While the assessment for Germany remained more or less stable compared to autumn, expectations for China have at least brightened slightly.

A trend is thus emerging whereby the outlook for Switzerland and other important trading partners is brightening, while the forecast for Germany remains extremely pessimistic. Alessandro Miolo, head of Audit & Assurance at Deloitte Switzerland, concludes that if the forecasts for Germany are confirmed, the Swiss export industry will have to increase its involvement in other markets.

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Declining number of employees expected

The CFOs are also optimistic about their own company, at least half of them. Only 16% are rather worried about the future; 63% expect turnover to rise in the next 12 months and 39% also expect margins to increase.

However, around a quarter of them expect the number of employees in their own company to fall, either due to redundancies or vacancies that are not filled. This percentage has now risen for the second time in a row.

This can partly be explained by the fact that companies do not expect to find suitable skilled labour within a reasonable period of time. The labour shortage remains a major problem for many companies.

+ Labour shortage remains acute in Switzerland

On the other hand, the areas of artificial intelligence and automation continue to gain in importance. According to the study, this is resulting in a lower willingness to hire and a shrinking workforce. This is also reflected in figures from the State Secretariat for Economic Affairs (SECO), which recently reported a decrease in job vacancies and is forecasting rising unemployment for the current year.

Geopolitics causing most concern

Geopolitical risks have risen spectacularly from tenth to first place in the finance directors’ worry barometer. However, the autumn survey took place even before the Hamas attack on Israel on October 7. The feeling of an increasingly uncertain world is also reflected in corporate concerns in view of the Middle East conflict, the war in Ukraine, tensions between Taiwan and China and the uncertain outcome of the US elections.

Concerns about regulation have also moved to the forefront, rising 11 places to fourth place. In this context, the CFOs mentioned regulations in the area of sustainability (ESG) for the first time. The increasing number and variety of regulatory requirements increased the time and costs involved, resulting in a conflict of objectives with regard to corporate requirements.

The survey was conducted between March 5 and April 5, 2024; 121 CFOs took part.

Translated from German by DeepL/ts

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