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The Deloitte CFO Survey: 2012 Q4 results

2013 outlook: Cash, costs and the search for opportunity

CFOs enter 2013 in a more optimistic mood than they entered 2012. The dominant concern for corporates a year ago was that the single currency could break up. Such fears have receded. Better news from the euro area and an end to the UK double dip recession have boosted spirits with CFO optimism up sharply from the lows seen at the end of 2011.

Alongside these signs of confidence, CFOs continue to worry that growth will be in short supply this year. Weak growth prospects for the euro area and the UK rate as the greatest worries for CFOs in 2013. Perceptions of financial and economic uncertainty remain high. The central concern for CFOs in 2013 is the economy, just as it was at the start of 2011, 2010 and 2009.

CFOs seem less worried about company-specific issues such as margins, cash flow and credit availability.  Indeed, large companies enter 2013 with healthy balance sheets and benefiting from benign financing conditions.  In the fourth quarter of 2012, CFOs reported a sharp decline in credit costs and now rate credit as being cheaper than at any time in the last five years. The economic outlook remains murky, but the cost and availability of debt finance, at least for the large businesses in our sample, have improved significantly in the last four years.

The picture that emerges is of businesses which are constrained by low growth and uncertainty rather than access to capital. CFOs balance sheet strategies have become increasingly defensive not for want of capital but for scarcity of opportunity. Large companies enter 2013 with a stronger focus on cutting costs and bolstering cash flow than at any time in the last two years.

Yet CFOs have not closed the door to growth. About half of CFOs think that troubled times create opportunities to take market share and expand capacity, or to implement overdue change within the business.  Big businesses are also more positive about undertaking capital expenditure than they were a year ago. The difference now is that such opportunities are more selective. CFOs cannot rely on steady growth to lift revenues. They have to work harder for, and carefully judge the risks of, expansion.

Our special question this quarter asked CFOs about the appropriateness of UK government policy for business.  Monetary policy, which includes interest rates, inflation and the availability of credit is seen by CFOs as being most appropriate. By and large major companies think the Bank of England has got monetary policy right. CFOs are also positive about UK labour market policies. The areas of greatest concern relate to micro, rather than macroeconomic policy – regulation, infrastructure, energy and immigration. For CFOs it is the micro side of the economy, rather than monetary policy, that needs attention.

CFO sentiment see-sawed through 2012, largely in response to the bad and the good news from the euro area. Through these ups and downs corporate strategies have become steadily more defensive over the last year. By and large big corporates have the firepower to hire and invest. Five years on from the onset of the financial crisis the missing ingredient, and one which holds the key to corporate behaviour, is confidence about future growth.  

Download the full report: The Deloitte CFO Survey 2012 Q4 results (PDF, 854 KB)
Download a PDF with the historical data of all regular questions (PDF)

About the Deloitte CFO Survey panel

This is the 22nd quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. The 2012 fourth quarter survey took place between 25th November and 11th December. 112 CFOs participated, including the CFOs of 36 FTSE 100 and 38 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 84 UK listed companies surveyed is £672 billion, or approximately 35% 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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