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Deloitte CFO Survey finds uncertainty knocks business confidence

Monday 28th October, 2019

According to the latest CFO survey by Deloitte CFOs are intensifying their focus on cost control, with 58% saying it is a strong priority for the next 12 months.

The findings reveal almost two-thirds of CFOs (65%) say their business faces high or very high levels of external financial and economic uncertainty, with just 7% saying now is a good time to take risk onto their balance sheets.

Increasing cash flow is a strong priority for 48% of CFOs and reducing leverage is a priority for 19%. In addition, 70% of CFOs expect hiring to reduce in the next 12 months and just 3% expect it to rise.

Ian Stewart, chief economist at Deloitte, said: “Perceptions of uncertainty are elevated and corporate risk appetite is vanishingly low. The priority appears to be curbing costs, not expansion. With Brexit cited as the biggest risk businesses face, the last quarter has also seen heightened concern over slowing growth in the UK and Eurozone and CFOs are tightening their purse strings in response.”

There has been a small shift in where CFOs see Brexit having an effect on their business plans. While 28% say that Brexit will curtail M&A activity, up from 25% in Q2.

Overall though, 76% of CFOs believe that the long term business environment in the UK will be worse as a result of leaving the EU, down from 83% in Q2.

The Deloitte CFO Survey gauges sentiment amongst the UK’s largest businesses. A total of 91 CFOs participated in the latest survey during September, including CFOs of 59 FTSE 350 companies.