Survey: Optimistic companies getting ready to expand this year

Finance chiefs at major UK companies are optimistic over prospects for growth in 2011.

Chief financial officers' confidence rebounded in the fourth quarter of 2010, according to a survey by accountancy firm Deloitte, published yesterday, while fears of a double dip have abated from the levels seen earlier in the year.

Finance chiefs at the companies surveyed, which include 35 FTSE 100 and 45 FTSE 250 companies, are shifting to expansion strategies including taking on new staff and undertaking capital expenditure, according to the survey.

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Economists expect UK economic growth to have slowed in the fourth quarter of 2010, and to continue declining in the first half of this year before picking up later in 2011.

Margaret Ewing, Deloitte partner and vice chairman, said: "If 2010 was the year of balance sheet rebuilding and cost-cutting, then 2011 looks set to be the year in which corporates start spending again. A new emphasis on expansion by the UK's large companies lends support to the idea that the recovery is likely to broaden out during 2011 aided by growth in private sector hiring and capital spending."

As finance chiefs enter 2011, they are increasingly positive on the outlook for revenues and are focussed on growth opportunities, the survey found.

The most frequently cited opportunities were investing or undertaking acquisitions at lower prices, growing organically and expanding in emerging markets.

But part of this optimism seemed to reflect confidence about demand from overseas, Deloitte said. Only 39 per cent of financial officers expected the UK to make the biggest contribution to the growth in their company' revenues in 2011 and 34 per cent of financial officers saw emerging markets, such as Brazil, India and China, as making the biggest contribution to revenue growth.