Portuguese investors cancel or postpone 50% of projects
Portuguese investors who had been planning to pursue big ticket projects both at home and overseas are, on average, more worried about the spectre of a major global recession than other nationalities.
According to a report from business consultants PwC, 50% of Portuguese developers, financiers and investors now say they will delay or cancel investments.
In fact, the report found that they were much more worried about an imminent slump caused by the Coronavirus pandemic than the average International investor.
The study called ‘Covid-19 CFO Pulse Survey’ analysed how Chief Financial Officers (CFOs), are reacting to the crisis and “what the main economic impact would be for their businesses”.
The consultants canvassed 91 Portuguese CFO’s in the country’s main companies. The survey revealed that: “Covid-19 could trigger a global recession with a significant financial impact and a reduction in consumer confidence.”
The survey was held between 23 and 25 March with hundreds of CFOs in scores of countries around the world.
But although Portuguese CFOs are more concerned than the international average about a looming global recession, the actual percentage of senior management worried about a fall in business revenues and profit was lower in Portugal than overseas.
“The main concern for CFOs in Portugal (84%) is the fear of a global recession, while just 48% of Portuguese business leaders believe that a return to normal would last between one and three months.”
PwC also concluded that the main measures taken had been “cost containment” (56%) while 50% were considering cancelling or postponing planned investment, and 41% had already made adjustments to their initial strategies.”
Measures expected for April included a reduction in production because of an incapacity to work remotely, changes to staff rotas and working hours because of reduced demand and layoffs.
Only 3% of CFOs quizzed believed that the current crisis would have no impact on their business, whereas 77% expected Covid-19 to have a negative impact, while 19% thought it was still too early to correctly evaluate the real dimension of the disruption caused so far on their businesses.
However, the majority of CFOs have not changed their strategies for Mergers and Acquisitions or are still considering them, but around one-quarter of CFOs already have a reduced appetite to invest according to the PwC survey.