CFOs on the defensive despite increased optimism

8 January 2013

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8 January 2013 | Anna Reynolds

CFOs have a more optimistic outlook for 2013, but need evidence that the economy is stable before committing to expansion, according to the latest Deloitte CFO Survey.

Finance chiefs from 112 companies, including 36 from FTSE 100 companies, took part in the survey, which revealed fears of a Euro break-up or a return to recession fell from 37 per cent in 2011 to 22 per cent in 2012.

Further, CFOs are now less concerned about company-specific worries such as margins, cash flow and credit availability. Just 4 per cent cited the cost and difficulty in raising finance as being a major problem for their business.

But finance directors are putting a greater focus on cost control than at any time in the last two years, with 50 per cent prioritising reducing costs over the next 12 months.

Ian Stewart, chief UK economist at Deloitte, told SM: “Despite rising optimism among CFOs, it is not translating into a willingness to spend. In a volatile economy, feeling optimistic today doesn’t mean you will be as confident in three months time. The lag time between changes in optimism and the way you run your business has changed.”

Stewart added the largest costs companies incur are in hiring, capital spending and purchasing of goods, which he says would remain under pressure in 2013.

The survey also asked CFOs how appropriate UK government policy is for business. Deloitte found that 81 per cent of CFOs said the most appropriate policy was monetary policy, including interest rates, inflation and the availability of credit. The majority of companies felt the Bank of England had a good policy in place.

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