Business confidence bounces back for big firms
By David Wood | 17th April 2023
Sentiment among finance leaders of the UK's largest firms has improved significantly since the start of the year.
Deloitte's latest survey found that a net 25% of chief financial officers are more optimistic about the financial prospects of their business than they were three months ago.
Having run well below the long-term average reading of -2% throughout the last year, this marks the largest increase in confidence since the COVID-19 vaccine rollout at the end of 2020.
Conducted between 21 March and 3 April, Deloitte's latest quarterly CFO Survey captures sentiment amongst the UK's largest businesses. A total of 64 CFOs participated, including the CFOs of 11 FTSE 100 and 24 FTSE 250 companies.
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.
Perceptions of external financial and economic uncertainty have fallen at the fastest pace since this question was first asked in 2010, from 71% of CFOs rating uncertainty as high or very high in Q4 2022, to 39% 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. 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."
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