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Deloitte CFO Survey: Expansion is back on the agenda

9 July 2013

  • 45% of CFOs say now is a good time to take risk on to balance sheets, the highest level recorded
  • Expectations for hiring and investment are  back to 2011 levels
  • UK-facing businesses more expansionary than at any point in the last two years
  • Credit seen as cheaper and more available than any point in the last six years

Chief Financial Officers (CFOs) of big businesses are shifting towards expansionary strategies and are more willing than ever to take on risk, according to the latest Deloitte CFO Survey.

The Q2 2013 CFO Survey, which gauged the views of 135 CFOs, including 37 from FTSE 100 companies and 45 from FTSE 250 companies, shows that CFOs’ expectations for hiring, investment and discretionary spending have returned to levels last seen in early 2011.

45% of CFOs say now is a good time to take risk onto their balance sheets, the highest in six years and more than double the level of a year ago.

CFOs are placing greater emphasis on expansion through introducing new products or services and by acquisition. They have also softened their focus on cost reduction to the lowest level in two years. 34% of CFOs say reducing costs is a priority for their business, down from 42% in Q1 2013.

CFOs see credit as being cheaper and more available than at any time in the last six years. A net 53% of CFOs see credit as cheap and a net 56% see credit as easily available.

In a sign of an improving domestic outlook UK-facing businesses, those deriving more than 70% of their revenues from the UK, have become more expansionary than at any time in the last two years.

Overall, CFOs see fewer risks to their business in the economy. Perceptions of uncertainty have dropped sharply: 73% of CFOs believe their businesses face an above normal, high or very high level of external macroeconomic uncertainty, down from a peak of 97% in late 2011. CFOs rate the chance of a breakup of the euro area at 9%, down from 36% a year ago. Over the same period the probability CFOs assign to the UK experiencing a recession in the next 2 years has dropped from 47% to 23%.

Business optimism has risen for the fourth consecutive quarter and is now well above average.

This quarter’s survey includes a special set of questions on monetary policy to coincide with the arrival of the new Bank of England Governor, Mark Carney. 85% of CFOs said that loose monetary policy is likely to lead to inflation running significantly above 2.0% for a prolonged period.

Ian Stewart, chief economist at Deloitte, said:

“Business optimism has been improving for some time but our latest survey shows that CFOs are translating this confidence into action. Rising risk appetite and a shift towards expansion show that large UK corporates are increasingly planning for growth.

“Expansion is back on the agenda for many businesses with expectations for hiring and investment back to levels not seen since early 2011 when the world seemed set for recovery. CFOs’ willingness to take risk on to their balance sheets has risen to the highest level we have ever recorded. The recession-era focus on cost-cutting and debt reduction is easing.”

“It is particularly encouraging to see the move toward growth among UK-facing companies. These companies have been consistently more defensive than their international facing peers in the last two years. Their shift towards more pro-growth strategies is a sign of an improving UK outlook.

“Our survey took place in the second half of June, during a period of turbulence in the financial markets caused by concerns about the withdrawal of quantitative easing in the US and a cash crunch in China. Yet despite this challenging backdrop CFO perception of risk has fallen while optimism and risk appetite have risen.

“In recent years high levels of economic uncertainty have been a major factor holding back business investment. Uncertainty has not died, but it has eased and this bodes well for investment.

“Our special questions this quarter show the CFOs expressing strong support for the Bank of England’s performance on inflation, the pound and providing monetary stimulus to the economy.

“But the results also testify to the challenges facing the new Bank Governor, Mark Carney. A majority of UK’s largest businesses rate the Bank’s performance on getting credit to the economy as inadequate or worse. And the overwhelming majority do not believe that the Bank will be to meet its mandate and keep inflation below its 2.0% target.”


Notes to editors

About the Deloitte CFO Survey
This is the 24th quarterly survey of chief financial officers and group finance directors of major companies in the UK.

The Q2 2013 survey took place between 14th and 28th June.

135 CFOs participated, including CFOs of 37 FTSE 100 and 45 FTSE 250 companies. The rest were CFOs of other UK listed companies, large private companies and UK subsidiaries of major companies listed overseas. The combined market value of the 92 UK-listed companies surveyed is £684 billion, or approximately 32% of the UK quoted market.

The Deloitte CFO Survey is the only survey of major corporate users of capital that gauges attitudes to valuations, risk and financing.

For copies of previous CFO Surveys, please visit

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

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