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The Deloitte CFO Survey: 2012 Q3 results

Strategies for uncertainty

CFO optimism has made up some of the record losses sustained in the second quarter as the euro crisis intensified. Spirits seem to have been lifted by the recent promise of more aggressive action from the Federal Reserve to support growth and from the European Central Bank (ECB) to strengthen the single currency.

Yet while central bank activism helped fuel a strong, 16% rally in global equity markets between June and mid September CFOs take a more cautious longer term view.

CFOs believe an unpredictable economic and financial environment is the biggest factor constraining investment. 90% of CFOs rate the economic uncertainties facing their business as being above normal and 45% expect the UK’s recession to run on or return within the next two years.

So, despite a pickup in business confidence, CFOs have continued to shift to more defensive balance sheet strategies, a process that has been underway since the start of the year. Increasing cash flow, cutting costs and reducing leverage are stronger priorities than at any time in the last two years; conversely capital spending is a lower priority than at any time in the last two years.

Recent announcements from the ECB have eased, but not dispelled, CFOs’ worries about the single currency. On average CFOs see a 27% probability of one or more countries leaving the single currency in the next 12 months. CFOs rate the weakness of the economies of the euro area as second only to macroeconomic uncertainty in its dampening effect on business investment.

Large company balance sheets look healthy, partly because of a favourable financing environment. CFOs are more positive on the outlook for cash than at any time in the last two years. Credit rates as being cheaper than at any time in the last five years and financing costs are expected to stay low.  The cost and the availability of external finance rate as weak constraints on investment and, despite worries about growth, only one in five CFOs expect revenues to decline over the next year.

Macro uncertainty is a key constraint, but CFOs remain alive to growth opportunities. CFOs say that long term growth in demand for their companies’ products and services is providing strong support for capital spending plans. Demand from emerging markets and industrialised countries such as the US and Japan, is providing some offset to weakness in the economies of the UK and the euro area.

Download the full report: The Deloitte CFO Survey 2012 Q3 results (PDF, 1.84 MB)
Download a PDF with the historical data of all regular questions (PDF)

About the Deloitte CFO Survey panel

This is the 21st quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. The 2012 third quarter survey took place between 11th and 26th September. 133 CFOs participated, including the CFOs of 35 FTSE 100 and 55 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 102 UK listed companies surveyed is £633 billion, or approximately 34% of the UK quoted equity market.

The Deloitte CFO Survey is written and produced by Ian Stewart, Chief Economist and Debapratim De, Assistant Manager, Economics & Markets Research at Deloitte. It is the only survey of major corporate users of capital that gauges attitudes to valuations, risk and financing. To join our panel of CFO respondents and for additional copies of this report, please contact Tulaine Trimble on 020 7007 1684 or email

Please visit for current and past copies of the survey, historical data and coverage of the survey in the media and elsewhere.

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