CFO Sentiment: Holding Firm in a Crisis

03 June 2026: The confidence of Australia's Chief Financial Officers (CFOs) in the economy has collapsed to a record low as the conflict in the Middle East lifts inflation expectations and sends feelings of uncertainty skyrocketing.

However, despite the global turmoil, many CFOs believe their businesses are relatively insulated from these shocks, even as they expect the broader Australian economy to be hit by more difficult economic conditions over the next 12 months.

Unsurprisingly, cost control has emerged as a major imperative on the CFO agenda, and rising AI usage in the finance function is driving efficiencies. However, only around one-third of CFOs say the technology is currently delivering value in line with or ahead of expectations, and less than 10% say it is lifting revenue.

These are just a few of the findings from the latest edition of Deloitte's biannual CFO Sentiment report, released today.

Key takeaways

• Conflict in the Middle East and significant disruption to global energy markets have caused confidence in the Australian economy to collapse to a record low of -36%.
• 83% of CFO respondents believe that interest rates will be higher in 12 months' time
• The net uncertainty rating has spiked to 93%, erasing the sharp fall seen six months ago.
• Following a recovery in sentiment six months ago, net optimism in own business prospects has moderated back to 50% - down 13 percentage points.
• 90% of firms are utilising AI; however, only 7% reported revenue gains from the technology.

Middle East conflict dashes optimism, economic expectations grim

After a promising outlook coming into 2026, the conflict in the Middle East has moderated CFO sentiment. Confidence in the Australian economy has plunged 58 percentage points, while CFO net optimism in their own business prospects has fallen 13 percentage points to 50%.

This indicates CFOs have faith in their own organisation's ability to withstand the economic shocks caused by the conflict: just 14% expect the conflict to have a 'significant negative impact' on the financial prospects of their organisations.

Despite this, net uncertainty has reached near record highs at 93%, only just topped by the record set during the pandemic. CFOs are also mostly resigned to a prolonged period of difficult global economic conditions and rising interest rates.

Perhaps unsurprisingly, a meaningful proportion of businesses are deferring investment decisions until there is greater clarity on how the conflict unfolds and affects their operations.

Deloitte Access Economics Partner David Rumbens said:"Rising domestic inflation and escalating conflict in the Middle East have tempered the optimism of CFOs, who now face an increasingly complex and uncertain economic environment in 2026."

"CFOs have spent the past few years navigating economic pressure and geopolitical disruption, and many will be turning to familiar levers in the months ahead. Managing costs and protecting liquidity will be front of mind. Those that can hold their position through this period will be better placed to act when conditions improve."

Pragmatic growth strategies amidst uncertainty

With an uncertain future ahead, CFOs are focused on shoring up growth in existing markets, with 60% of respondents citing acquiring customers within existing geographies as a standout priority.

Tightening cost controls far outstripped other measures in response to economic uncertainty, with 56% of CFOs citing this as their leading business reaction to the Middle East conflict and energy supply risks.

Increasing sales to existing customers was also a key priority amid skyrocketing uncertainty, with 38% of CFOs taking this position. However, with geographic expansion among the lowest growth drivers and existing customers likely cutting budgets, businesses may be left to fight over a diminishing field.

Deloitte CFO Program Partner Geoff Lamont said: "CFOs are focused on protecting their position. Controlling costs stands out as a priority, while many - but not all - businesses are holding back on investment until there is more certainty about how the conflict will develop and what it will mean for their operations."

AI strategy shifting from adoption to scaling

AI is emerging as a practical way to reduce costs through efficiency gains. Adoption is now near universal across Australian businesses, but progress in maturity is slowing. While 90% of CFOs report at least some AI use, turning that into enterprise-wide value remains the bigger challenge.

The finance function, which has historically lagged the broader organisation in AI adoption, has now largely closed the gap. AI deployment has risen from 75% six months ago to 88% today, while the share not planning to implement AI, or still in the planning stage, has fallen from 26% to 12%.

However, only 37% of CFOs say their AI spend is delivering value in line with or ahead of expectations. Nearly half either report no impact so far or say the return is unclear or hard to quantify, while just 7% say AI is already lifting revenue.

For finance functions, talent and skills gaps (64%) and data-related issues (62%) remain the main barriers to AI adoption. A year ago, only 34% of CFOs identified talent as a constraint, suggesting that as AI ambitions have grown, so has recognition that the capability needed to deliver them is in short supply.

Geoff Lamont said: "In finance, AI is being used far more to reduce cost and friction in existing processes than to generate new insight. CFOs point most often to transactional and document-heavy tasks, such as invoice processing, where off-the-shelf tools are a natural fit."

"It highlights an adoption pattern built around internal productivity gains rather than strategic transformation. This points to early-stage adoption: CFOs are buying automation but are not yet building intelligence."

About CFO Sentiment

CFO Sentiment is a biannual publication that offers a compelling view of Australia's business landscape through the eyes of its financial leaders. Deloitte has surveyed senior finance executives of major Australian listed companies since 2009. This CFO Sentiment survey covers the first half of 2026 and took place between 7 and 24 April 2026.