Finance chiefs at the UK’s largest companies are becoming more optimistic about future performance, new research shows.
Deloitte’s latest quarterly CFO Survey found that, compared with three months ago, a net 25% of chief financial officers (CFOs) now have a more positive outlook about the financial prospects of their business.
This compares to a net 17% feeling the opposite three months ago, marking the largest swing in confidence since the Covid-19 vaccine rollout.
At the same time, perceptions of external financial and economic uncertainty have fallen sharply, from 71% of CFOs rating uncertainty as high or very high in Q4 2022, to 39% doing so in Q1 2023.
CFOs reported a slight rise in the cost of credit and a marginal improvement in credit availability in the first quarter.
The findings also show that risk appetite remains below normal levels, with just 17% of CFOs saying this is a good time to take greater risk onto their balance sheets. Instead, CFOs are focused on cost control and building up cash.
“The economic unpredictability that marked the beginning of 2023 has started to clear, with CFOs reporting the largest decline in perceptions of uncertainty to date,” commented Ian Stewart, chief economist at Deloitte. “Business confidence has rebounded, helped by a decrease in energy prices, an easing of Brexit concerns and an improving inflation backdrop.
“Crucially, finance leaders report little change in credit conditions, suggesting that March’s events in the global banking system have not affected the pricing and availability of credit for UK corporates. Despite a brighter outlook, CFOs are alive to the continued risks facing the economy. Corporates remain in defensive mode and CFO risk appetite is subdued.”
