Global economic uncertainty is hampering the ability of companies to grow and deters them from creating new jobs, according to a survey released today.
More than one third of chief financial officers say the global economic outlook is their major concern for the 2012 calendar year, the latest quarterly CFO Survey by financial services provider Deloitte says.
The survey comes a week after government data showed that total employment numbers last year contracted for the first time in 20 years, further adding to expectations for a rising unemployment rate in 2012.
The Deloitte survey also showed that nearly 80 per cent of CFOs believed that economic uncertainty was above normal levels.
Deloitte chief operating officer Keith Skinner said the World Bank's recent downgrade of its global growth forecasts had dampened business optimism and that CFOs were avoiding taking on any more risk.
"Instead, they are focused on improving cash flows and organic growth rather than longer-term investments or acquisitions," Mr Skinner said.
"This ongoing uncertainty is undoubtedly hampering the growth prospects of many companies."
Mr Skinner said 84 per cent of CFOs surveyed had indicated that they had no plans hire more staff over the next 12 months.
The survey found that many CFOs believed that the European debt crisis had driven up the cost of borrowing from banks and tightened the availability of loans.
Many CFOs had indicated that the cost of new credit was not in line with recent cuts to the Reserve Bank of Australia's cash rate.
Also, the appetite of CFOs to take over other companies had diminished as economic conditions had failed to improve.
Mr Skinner said 45 per cent of CFOs expect their operating margins to fall over the next year.
The results of the latest survey were released on Monday.
The survey questioned the CFOs of major companies listed on the Australian Securities Exchange.
Seventy-three CFOs participated in the survey, taken from December 8, 2011 to January 12, 2012.
