Tuesday 4th April 2017
According to Deloitte’s latest CFO Survey, business optimism and risk appetite have continued to rise from post-referendum lows and the effects of Brexit on corporate sentiment are easing.
The finding reveals 31% of CFOs say they are more optimistic about prospects for their company than they were three months ago, up from 27% in Q4 and just 3% immediately after the referendum. This is the highest level since Q2 2015, when 35% were more optimistic.
17% say they are less optimistic, down from 22% last quarter and 74% after the referendum. 34% report high or very high levels of uncertainty facing their business, down from 50% last quarter.
Risk appetite continues to climb but remains below long term averages. 26% say now is a good time to take risk onto their balance sheets, up from 21% in Q4 and 8% after the referendum. However, this compares to 51% 12 months prior to the referendum.
CFOs are shifting away from defensive balance sheet strategies. 34% say increasing cash flow is a strong priority, down from 41% in the previous quarter, while 42% say they will focus on cost reduction, down from 45%.
Overall, 60% of CFOs say the business environment will be worse when the UK leaves the EU, down from 66% in the previous quarter. 19% say that the business environment will be better as a result of Brexit, up from 14% in Q4.
When asked about the effects of Brexit on corporate spending, CFOs’ attitudes continue to soften. 26% say Brexit will see their own capital spending decrease, down from 35% last quarter and 58% after the referendum. 30% say Brexit will cause them to slow hiring, down from 39% last quarter and 66% following the vote. 11% say M&A activity will weaken, down from 19% last quarter and 40% following the referendum.