UK business leaders increasingly optimistic for future, Deloitte survey finds

Finance bosses at the UK’s largest companies are increasingly optimistic about the prospects for their businesses, new expert research has suggested.
By Chris Burn
Published 18th Apr 2023, 05:45 BST

According to Deloitte’s UK CFO Survey Q1 2023, a net 25 per cent of CFOs are more optimistic about the financial prospects of their business than they were three months ago. This marks the largest increase in confidence since the COVID-19 vaccine rollout at the end of 2020.

Conducted between March 21 and April 3, Deloitte’s latest quarterly CFO Survey involved 64 participants from some of the country largest FTSE 100 and FTSE 250 companies.

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This quarter’s survey was conducted in the period following the collapse of Silicon Valley Bank on 10 March and pressures on some regional US banks. However, the findings suggest these events seem to have had little, if any, impact on UK CFO sentiment.

A Deloitte logo is pictured on a sign outside the company's offices in London on September 25, 2017. (Photo by Daniel LEAL / AFP)A Deloitte logo is pictured on a sign outside the company's offices in London on September 25, 2017. (Photo by Daniel LEAL / AFP)
A Deloitte logo is pictured on a sign outside the company's offices in London on September 25, 2017. (Photo by Daniel LEAL / AFP)

Perceptions of external financial and economic uncertainty have fallen at the fastest pace since this question was first asked in 2010, from 71 per cent of CFOs rating uncertainty as high or very high in Q4 2022, to 39 per cent doing so in Q1 2023.

CFOs now rate external uncertainty at levels far below the previous peak last autumn, the start of the pandemic in 2020, and following the EU referendum in 2016.

Ian Stewart, chief economist at Deloitte, said: “The economic unpredictability that marked the beginning of 2023 has started to clear, with CFOs reporting the largest decline in perceptions of uncertainty to date.

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"Business confidence has rebounded, helped by a decrease in energy prices, an easing of Brexit concerns and an improving inflation backdrop. Crucially, finance leaders report little change in credit conditions, suggesting that March’s events in the global banking system have not affected the pricing and availability of credit for UK corporates.

"Despite a brighter outlook, CFOs are alive to the continued risks facing the economy. Corporates remain in defensive mode and CFO risk appetite is subdued.”

A majority of CFOs expect to see a significant growth in capital spending on artificial intelligence (AI) over the next five years.

Mr Stewart added: “The CFOs foresee artificial intelligence helping to drive UK productivity, an outcome that could provide a lasting boost to business growth. They are divided, however, on how AI will affect the number of jobs in the economy, highlighting the need to ensure the gains from new technologies are widely shared.”

Related topics:Deloitte