In late 2025, a major biannual sentiment survey of Australia’s top finance chiefs found that views on business performance and the broader economy are moving in different directions. Just six months earlier many CFOs were upbeat about the national outlook but wary about their own ability to deliver on strategy. Now the picture looks more nuanced, with boardrooms feeling stronger about their own numbers yet the mood on the economy is splitting into clear camps of optimists and pessimists.
The latest survey shows a sharp rebound in business confidence. Net optimism about companies’ own financial prospects has climbed by around 14 percentage points to roughly 63%, which points to a broad expectation that 2026 will be a better year for balance sheets. At the same time, perceived external uncertainty has eased by about 26 percentage points to near the levels last seen in 2018, as many finance leaders judge that global trade tensions are unlikely to trigger major shocks for Australia or directly damage their own organisations. Around three in four CFOs expect revenue to grow over the next year and nearly half anticipate margin expansion, even though this stronger mood has not yet flowed through to big jumps in hiring or capital spending.
Risk appetite is also shifting. Close to 4 in 10 CFOs now say it is a good time to take on more risk, which suggests a cautious turn away from pure defensiveness. Yet investment behaviour still looks conservative, with many organisations holding off on major capital commitments until business cases strengthen further. Underneath this, views on the economy are diverging, with overall net optimism sitting at roughly 22% and near its highest mark since late 2022, while both the optimistic and pessimistic camps are growing as the neutral middle shrinks by about 10 percentage points. Around 17% of finance leaders now expect a weaker economy, which points to a two track environment where some sectors are poised for growth while others remain constrained.
Inflation and interest rates sit at the centre of this split. Even before the most recent upside surprise in official price data, more than half of surveyed CFOs expected inflation to sit between 3% and 4% in a year’s time, which is up sharply from about 16% in the previous survey. This shift is feeding concern that interest rates may need to rise again to rein in prices. Just over one third of respondents now see higher borrowing costs as a major risk in the coming 12 months, a jump of around 21 percentage points. The biggest internal concern remains the risk of not being able to deliver on strategy, which is cited by roughly 57% of CFOs, although that share has eased slightly as confidence improves. Many also flag challenges around digital implementation and disruption, while nearly half are more worried about a potential domestic downturn which keeps cost control and operational efficiency firmly on the agenda.
Looking ahead, this mix of stronger business confidence and persistent macro risks seems likely to produce cautious, flexible decision making rather than a rush into aggressive expansion. If inflation moderates and global tensions remain contained, CFOs appear ready to shift from defensive cost cutting towards more proactive investment and growth initiatives. If price pressures or geopolitical shocks flare again, organisations may hold back, prioritising liquidity, adaptable planning and staged investments. In this environment, finance leaders look set to focus on keeping options open, ready to scale up spending when conditions improve but also prepared to pull back quickly if the economic picture darkens.
