Surviving into growth
Organisations must keep costs under tight control without damaging their ability to benefit from the eventual upturn, explains Rod Newing.
As the economy continues to struggle with low growth, finance managers must continue to keep tight control on costs. However, as long as we avoid a ‘double dip’ recession, as time passes we must inevitably get closer to the eventual upturn in the economic cycle. Many economists are forecasting growth to return from next year, but the current sluggish market means that further cost cutting and cost control are still required.
Deloitte’s latest quarterly CFO survey indicates optimism has fallen in the recent quarter and companies have become more focused on cost control and managing cash flow. “Despite the drop in optimism in the second quarter, finance chiefs’ number one priority is introducing new products and services into new and expanding markets,” says Oliver Hemming, director in strategy consulting at Deloitte. “This is over and above increasing cash flows and reducing costs.”