SEB's Financial Officers' Index: Continued Optimism Despite Increasing Uncertainty
Optimism remains strong among Swedish financial officers and has only decreased marginally since SEB’s previous Financial Officers’ Survey, likely reflecting a slower than anticipated recovery in the global economy. With most officers nevertheless believing higher volumes will contribute to improved profitability during the current year, earnings expectations remain high. While respondents appear more concerned this year by higher raw material costs, an increasing number of companies expect to raise prices.
SEB’s survey, which polled around 70 of Sweden’s largest companies, shows respondents only slightly less optimistic. SEB’s Financial Officers’ Index for August stands at 61, down from 62 in May. The Financial Officers’ Survey suggests respondents are now marginally more cautious concerning current business conditions, but has also increased concern for raw material costs and see upcoming price hikes.
“Uncertainty regarding the business climate has increased with fewer financial officers regarding it as favourable. At the same time most respondents expect volume increases to support higher profitability this year. Cost cutting continues to be regarded as important though still much less so than in 2009 when a record share of respondents prioritised this. Almost a third of respondents expect higher profits this year compared to 2009,” said Ebba Lindahl, head of credit research at SEB and co-author of the report.