With low levels of uncertainty, improved access to finance and greater confidence in the Bank of England's policies, chief financial officers (CFOs) are gearing up for expansion, investment and hiring in 2014, according to the latest Deloitte CFO Survey.
The fourth quarter 2013 CFO Survey gauged the views of 122 CFOs, including 32 FTSE 100 and 41 FTSE 250 companies. The survey shows that business confidence has improved for the sixth consecutive quarter and that:
The policies of the new governor of the Bank of England, Mark Carney, have contributed to rising business optimism. 49% of CFOs say that under Carney the Bank’s policies have made them more positive about the UK’s economic outlook while just 3% say they have made them less optimistic. (49% say the Bank’s policies have had no effect.) Most CFOs think the Bank will be unable to meet its 2.0% inflation target - 53% believe that inflation will be above 2.5% in two years’ time. Meanwhile, 59% expect interest rates to rise by the middle of 2015 and 23% expect interest rates to rise in the course of 2014.
Ian Stewart, chief economist at Deloitte, said: “CFOs enter 2014 in buoyant mood with a focus on expansion, investment and hiring in the year ahead. This bodes well for the broad-based recovery policymakers hope to see in 2014.
“Uncertainty and credit shortages, two major blocks on business activity, have eased substantially and CFOs believe that the level of financial and economic risk facing their businesses has reduced significantly in the past year. Whether through introducing new products and services, M&A or moving into new markets, expansion is firmly back on the agenda.
“Large corporates have good access to capital and CFOs are more positive about financing their business with equity and bonds than at any time in the past six years. But in a sign that banks are lending once again CFOs rate bank lending as the most attractive form of finance for their business for the first time since 2008. A record 80% of CFOs now say bank credit offers an attractive source of finance.”
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