CFOs: Optimistic regarding arrival of migrants

December 18, 2015 | 2 min read

European CFOs remain optimistic about the prospects of the economy and the company. More than half of them experienced accelerating growth in business productivity. And although there is division on whether or not to admit more refugees, there are, on balance, more CFOs who actually see opportunities in the arrival of migrants. This is one of the striking results of CFO Survey Europe, the world's longest-running quarterly survey of CFOs conducted by TIAS School for Business and Society (Tilburg) and Duke University (North Carolina, USA). 

Economic confidence is stable but productivity growth remains largely dependent on investment 
While we saw optimism decline in the United States and China (traditionally the growth engines of the global economy), the re-emerging economic confidence among CFOs in Europe remains undented at the end of this year. Both the number of optimists (42%) and the average level of optimism (58 on a scale of 100) both remain at the level of the previous quarter. 

European CFOs also say that they are more optimistic about the prospects of their company. Nearly 55% of CFOs saw the growth of business productivity accelerate in 2015, which in the majority of cases is attributed to computerization and changes to business processes. More than half of them, however, indicate that the introduction of a new business model also contributed to this acceleration. 

According to Kees Koedijk, Dean and Director of TIAS, this is not surprising: "The landscape in which today's companies operate is continuously subjected to disruptive change. That logically calls for innovation in traditional business models. But not only that, it also requires a lot of investment. Thus, more than 45% of CFOs say relatively more investments are needed to keep up with the changes in the industry. However, that also immediately entails a potential risk. If there is too little investment it can eventually lead to aging of (fixed) assets and means of production." Forty-four percent of CFOs already see this happening, and over a third of this group even indicate that it has an inhibitory effect on the current productivity of their business.

Refugee problem is addressed wrongly but will eventually also offer opportunities
Sixty-two percent of CFOs believe that the current refugee crisis in Europe poses a greater challenge than the economic crisis. Almost 80% believe that the current situation has a disruptive effect on the social cohesion within Europe, and more than half think that there will also be tensions in the labor market, possibly caused by labor competition, labor displacement, and wage pressures. Still, some 43% do not anticipate the refugee crisis to have no or hardly any negative impact on the economy, for example, through increased government spending, benefits, and social costs. 

On the contrary, more than half of the finance directors are convinced that the migrant crisis will certainly create opportunities in the long term. Thus, 54% of them think that there will be a positive economic impact because of a possible increase in the demand for products and services. Fifty-six percent also see the potential to use the flow of migrants to meet the looming demographic challenges in Europe (including the aging population, a shrinking working population, and increasing demand for care). 

However, much still needs to be done. Over 80% of CFOs are of the opinion that European leaders are addressing the refugee problem wrongly. The crisis should be coordinated at the EU level rather than at the national level, say 85%. In addition, 43% of respondents say that European countries should accept more refugees, while nearly 70% say that European countries should also contribute more financially. More than a third of the companies are also prepared to hire refugees to help alleviate the current crisis. 

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Quarterly report Q4, CFO Survey (2015)
More information on CFO Survey

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