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Optimism among UK CFOs reaches 18 month high

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.

Ian Stewart, chief economist at Deloitte, said: “Brexit still tops the risk list, although at a lower reading than the last two quarters. CFOs believe the Brexit headwinds have eased and see far less damage to their spending plans than earlier expected. While most still see Brexit having an adverse effect on the business environment, even here the degree of negativity has fallen.”

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