BUSINESS CONFIDENCE among leading financial executives (CFOs) took a hit at the end of last year, according to new research.

The Deloitte CFO Survey for the fourth quarter of 2010 found that only 42 per cent of chief financial officers were expecting their company to become more profitable over the next six months. This compared to 61 per cent in the previous period.

The outlook for sales also deteriorated, with just under half of all CFOs surveyed expecting turnover to increase over the next half-year, down from 58 per cent previously.

Roughly one quarter of companies are bracing themselves for a decline in profits and turnover.

“There has been a noticeable decline in outlook among Irish CFOs,” said Shane Mohan, a partner at Deloitte. “It is unclear if this is a response to the tumultuous events of last year which culminated with the EU-IMF deal or a reflection of a more sustained pattern.”

CFOs are also less optimistic about the outlook for the economy, with 38 per cent now expecting that growth will not return until the first half of 2012, up from 14 per cent.

Despite the deterioration in sentiment, the research contained some positive findings. For instance, cost management no longer features among the top three challenges cited by CFOs.

According to Mr Mohan, this indicates that any cost-cutting programmes that may have been implemented have been successful. “CFOs can now look to further position their companies for growth,” he said.

This is the sixth in a series of quarterly surveys of CFOs in major Irish-based companies. The survey was conducted in December 2010, and chief financial officers of listed companies, large private companies and Irish subsidiaries of overseas multinational companies participated.