Queensland CEOs' confidence falters as concern resurfaces about global and local business conditions
Brisbane (July 27, 2010): While Queensland CEOs' confidence on employment, investment and profit has held up this quarter, there has been a significant decrease in their confidence about the economy, according to the third CEO Financial Index.
The CEO Financial Index is a commissioned quarterly survey of The CEO Institute's Queensland members (the CEOs and leaders of the state's largest private and public companies and professional firms). The Index tracks CEOs' expectations of business and economic outlook.*
The CEO Institute's Queensland CEO, Sue Forrester, said the third quarterly poll, taken this month, shows Queensland CEOs are not as bullish as 3 months ago, but confidence is still higher than in 2009.
"Only 58% agreed that the economy is heading in the right direction (down from 82% last quarter), but it was pleasing that expectations of increasing investment, employment and profitability were holding up", Ms Forrester said.
61% expect to employ more in the next 6 months, 61% expect to invest more, and 49% expect higher profits (with only 23% expecting a decline in profit). This compared to the March 2010 results, where 61% of leaders expected to be hiring, 63% expected to be investing and 56% expected higher profits (25% expected lower profits).
"The mood of CEOs was quite upbeat in the first two quarters of this year and while confidence about the economy appears to be on the wane, respondents still expect their own businesses to be fairly robust for the next 6 months," Ms Forrester said.
"Issues CEOs faced during the Global Financial Crisis have resurged. It was not mentioned directly 6 months ago, but is now a significant concern for our members.
"Our next quarterly report should show whether confidence in the future of the economy picks up or whether business behaviour adjusts down to fit expectations. If it's the latter, we may see the economy cool."
Ms Forrester said respondents to the CEO Financial Index indicated the biggest impact on their business in the next 6 months would be the federal election (24%) and the mining tax (16%). Business confidence and the GFC were the next on the list with 11% each, and 9% of CEOs expect some difficulty in hiring appropriate staff.
CEOs said the biggest impact on their businesses in the past 6 months had been the Resource Super Profits Tax (16%). Queensland CEOs were fairly evenly divided on whether taxing mining companies differently from other companies was a good move.
Index and components for December 2009, March 2010 and June 2010:
December | March | June | |
|---|---|---|---|
Economy | 17 | 19 | 10 |
Employment | 9 | 8 | 8 |
Investment | 0 | 10 | 9 |
Profit | 4 | 8 | 7 |
INDEX | 30 | 45 | 33 |
The CEO Financial Index for the 2010 June quarter is 33, down from 45 in March and slightly above the 30 recorded in the initial index in December 2009.
* The CEO FInancial Index is conducted online for The CEO Institute by polling company Internet Thinking. The Index is derived from surveying CEOs on four different business areas - economy, employment, investment and profitability - tracking over time how the leaders of significant businesses in Queensland view the economy. The Index has a maximum value of 100 and mininum value of -100 (with 100 meaning that all respondents were positive and -100 that all respondents were negative). There were 55 responses for this Index.
About The CEO Institute
Established in 1992 as a peer-to-peer membership organisation for chief executives and with offices in Brisbane, Melbourne, Perth, Sydney and Adelaide, The CEO Institute has become Australia's premier network of business leaders. The CEO Institute provides a peer-learning forum for CEOs and senior executives to meet regularly and share insights and exchange views on the business issues that matter.
For a copy of the CEO Financial Index report or to interview Sue Forrester of The CEO Institute, contact:
Kathryn Britt
Cicero Communications
P: 0414 661 616 or (07) 3716 0756
kathryn@cicero.net.au