This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.

Bookmark Email Print page

Deloitte CFO Survey: Confidence triple dips

9 July 2012

  • The latest CFO Survey shows the sharpest decline in confidence since 2007;
  • This is the third major dip in CFO confidence in the last five years;
  • UK chief financial officers and finance directors see a 36% probability of one or more countries leaving the euro by the end of 2012;
  • CFOs have reacted to a weaker and more uncertain economic outlook by adopting more defensive strategies;
  • 80% say this is not a good time to take risk onto their balance sheet;
  • The cost of credit for large businesses is seen at being at its cheapest level in five years;

Economic uncertainty and the outlook for demand are the two biggest influences on changes to investment decisions being made by large UK-based corporates, according to the latest Deloitte CFO Survey. Access and pricing of external finance are seen as lesser issues, with just 4% of CFOs citing them as influencing factors.

The Q2 CFO Survey, which gauged the views of chief financial officers (CFOs) and finance directors from 137 major companies, including 39 FTSE 100 and 57 FTSE 250 businesses, reveals that, once again, worries about recession and a breakup of the euro are having a direct impact on the confidence, behaviour and business strategies of UK corporates.

Large UK companies entered 2012 with the view that a breakup of the euro posed the biggest threat to their business. CFOs now see a 36% probability of one or more countries leaving the Single Currency by the end of this year, up from 26% last quarter. Major UK-based corporates have stepped up their preparations for the possibility of a breakup of the euro. 28% say their own plans for coping with a breakup are ‘made’ or ‘at an advanced stage’, compared to 18% in Q1.  

Business confidence has also been hit by the UK’s return to recession. After optimism briefly rallied in the first quarter, CFOs and finance directors now see an almost one-in-two chance of the recession continuing to the end of this year or for the economy to hit a ‘triple dip’ recession within the next two years.

The Q2 Survey shows the sharpest decline in corporate confidence since the Deloitte CFO Survey started in 2007. Along with the post Lehman decline, CFO sentiment has now seen three major dips in the space of five years. Corporate sentiment has zigzagged over the last year. Optimism plummeted on the gathering euro crisis in the latter half of 2011, before rising in the Spring as the European Central Bank injected liquidity into the banks, and has now fallen back sharply in the second quarter.

The CFO Survey reveals that access to finance has not been a significant influence on recent investment plans by large companies. Only 4% of CFOs cited the cost or availability of finance as having influenced recent changes to their investment plans. But, 82% said that expected demand, and uncertainty about the economic environment had influenced recent ‘capex’ decisions.

CFOs currently see credit as being cheaper than at any time in the last five years. While credit availability has deteriorated, it is not rated as being particularly hard to obtain, suggesting that, at least for large corporates, demand conditions have been the main influence on capital expenditure.

Ian Stewart, Deloitte chief economist, comments: “The CFO Survey underscores the connection between the macroeconomic environment and corporate behaviour. In an indication of the challenge in getting corporates to invest their cash reserves and drive UK economic growth, 95% of CFOs rate the current financial and economic uncertainties facing their business as being above normal. Uncertainty has had a corrosive effect on risk appetite and 80% of CFOs say this is not a good time to take risk onto their balance sheets.

“Last quarter’s CFO Survey highlighted a paradox – despite a strong rise in business confidence, CFOs were pursuing defensive balance sheet strategies. Events in the last three months seem to have vindicated their underlying caution. Views on the degree of risk facing the corporate sector, like the equity markets, are changeable, and this latest Survey shows that CFOs see plenty of risks ahead. Economic uncertainty remains the big constraint on corporate expansion.”

Mark FitzPatrick, head of Deloitte’s CFO Programme, concludes: “As when the economy slid into recession in late 2008, corporates are reacting by cutting costs and bolstering cash flow. Companies are more focussed than they were 12 months ago on defensive balance sheet strategies, such as reducing leverage and disposing of assets. They are less likely to be making acquisitions or undertaking capital expenditure. On balance, CFOs see hiring, capital spending and discretionary spending declining over the next year.”

- Ends –

Notes to editors:

About the Deloitte CFO Survey
This is the 20th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. The 2012 second quarter survey took place between 15th and 29th June. 137 CFOs participated, including the CFOs of 39 FTSE 100 and 57 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 105 UK listed companies surveyed is £620 billion, or approximately 34% of the UK quoted equity 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

Media contacts

Jamie Harley
Deloitte LLP
Job Title:
Head of Media Relations
+44 (0) 20 7303 5037

Share this page

Email this Send to LinkedIn Send to Facebook Tweet this More sharing options

Get in touch

More on Deloitte