AICD Survey Reveals Plummeting Confidence and Key Challenges for Directors

The 2nd Half 2024 AICD Director Sentiment Index survey is out, and the results aren’t great.

Directors’ confidence has plummeted in the past six months to its lowest level in ten years! (COVID aside.)

Other findings include:

• Just under half (46%) of directors expect the country to be in recession in the next 12 months, up from 31% since the first half.
• The most significant economic challenges facing businesses are the cost of living (43%), inflation, and high interest rates (42%). The fastest growing concern, up 5 points to 14%, is Australian government debt levels.
• 38% of directors say the housing market has negatively impacted their business.
• Trust that Governments understand business is seriously missing, with less than 23% agreeing that Government understands business.

It is interesting to note that trust was the topic of a previous article.

Trust in our world needs serious rethinking. I am incredibly grateful that our clients trust us to deliver results for them.

• The importance of climate change continues to decline in directors’ minds. 71% do not have any targets, and 54% do not plan to set any in the next 12 months.
• Directors believe productivity growth is the most pressing issue for the Government to address. The score is the highest since the first half of 2021.

• Profitability is expected to decrease by more directors than those who expect an increase.
• It will be interesting to see how directors react to the US election. Only 10% said a Trump win would improve Australia’s relationship with the US, while 70% felt Harris would improve it.

Source: https://www.aicd.com.au/content/dam/aicd/pdf/news-media/research/2024/dsi-2h-2024-insights-report-web.pdf

The questions that arise from this information for me are:

• How confident are you that your company’s capital utilisation balance is right?
• Do you have good visibility into your costs, and are they under control?
• Are you making the best use of technology that you could be? What extra could be extracted from your past investments?

Our IPA™ process can assist with your inventory policy settings. This will help to rebalance your working capital and free up cash for the business.

Our ERP Restoration™ process can help you maximise the use of the existing investment in your ERP.

The majority of implementations rarely gain the value that was promised in the sales cycle. Now might be precisely the right time to extract that value. Reach out for a confidential chat.

© David Ogilvie