Finance executives are more optimistic, says study

The confidence of Brazilian finance executives rose in the 4th quarter of 2023, shows a study carried out by Ibef-SP (Brazilian Institute of Finance Executives São Paulo) and by Saint Paul School of Business. From October to December, the iCFO (CFO Confidence Index) was 133.1 points compared to 127 points in the previous quarter. Here's the complete (2MB).

The iCFO measures executives' expectations regarding the economy over the next 12 months and serves as a thermometer for different production sectors. It is subdivided into three components: confidence in the macroeconomy, in the sector and in the company. The iCFO scoring scale ranges from 20 to 180, with 180 points indicating the highest level of optimism and 20 points the highest level of pessimism.

When analyzing CFOs' confidence in relation to the macroeconomy separately, the indicator (iCFOm) showed the greatest volatility. In the last quarter, it reached 130.8, with a negative variation of -1.1 percentage points in relation to the previous quarter.

When comparing the indexes referring to the sector and the company, a positive variation was observed. iCFOs (sector) reached 135.8 points, an increase of 12 pp, and iCFOe (company) reached 132.8 points, an increase of 7.5 pp

Executives' optimism reflects companies' profitability and profitability projections. According to the survey, 71.7% of respondents say they expect an increase in return on equity.

The share of executives who say they expect an increase in EBITDA (profit margin before interest, taxes, depreciation and amortization) also increased to 75%.

According to the study, the main concerns of executives in the 4th quarter of 2023 were:

Regarding the destination of investments planned over the next 12 months, the executives responded:

1. 21.9% say they will be used to expand the company's installed capacity;
2. 20.7% say they will invest in information technology;
3. 16.1 say they will invest in new lines and business units.