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Finance bosses less defensive as confidence up

Business confidence among chief financial officers has improved for the third consecutive quarter, according to the latest Deloitte CFO survey.

120 CFOs provided their views on the macroeconomic environment, and the lowest level for two and a half years identified “financial uncertainties.”

Corporate risk appetite was shown to be rising as 34% of CFOs said now is a good time to take risk on their balance sheets, compared to 25% in Q4 2012.

Credit conditions for large companies were seen to have improved for the third consecutive quarter, as 69% of CFOs say that credit is more readily available.

The survey revealed CFOs were reducing their emphasis on “defensive” balance sheet strategies, and the proportion of CFOs prioritising cost control dropped from 50% in Q4 2012, to 42% in Q1 2013.

Ian Stewart, chief economist at Deloitte, said: “CFOs have had to adapt to high levels of macro uncertainty in the last five years, which has had a pronounced effect on the way businesses are run. Sustained declines in uncertainty offer the prospect of stronger corporate activity to come. Our index of corporate defensiveness, having trended higher for two and a half years, has declined sharply.

“British business looks set to benefit from a less risky and improving global economic backdrop. UK-based businesses with strong overseas exposure have become much more willing to take risk and are shifting towards more expansionary policies.

“UK-focused businesses have become more optimistic, but remain defensive when compared to businesses focused on overseas markets.

“Business confidence has zigzagged in recent years in response to the good and bad news from the economy and financial markets. This quarter’s survey shows a surprisingly broad-based rise in confidence among the UK’s largest businesses.”

This was posted in Bdaily's Members' News section by Tom Keighley .