Confidence returns to Britain's finance chiefs
Tuesday 04 January 2011
Confidence has returned among financial officers at Britain's largest companies, with many firms planning to expand this year as fears of a double-dip recession fade.
The latest survey of chief financial officers, compiled by Deloitte, found managers were in a "more buoyant mood with a new focus on growth" after confidence rebounded in the past quarter. But almost two-thirds believe their company's growth will come from outside the UK.
The accountancy group said the study supported the idea "that the recovery is likely to broaden out during 2011, aided by growth in private-sector hiring and capital spending".
Ian Stewart, the chief economist ay Deloitte, said the findings were "striking", with the boost to confidence against the backdrop of a fourth quarter rally in financial markets. "In the past three months, chief financial officers have become much more positive about hiring and capital expenditure," he added.
The optimism among a snapshot of 35 companies on the FTSE 100 and 45 on the FTSE 250, as well as large private groups and UK arms of international conglomerates, has recovered from fears of a double dip earlier in the year. They are upbeat about the chances of revenue and profits growth in 2011, with many set to take on new staff and embark on spending plans that had been put on hold.
Corporate appetite for risk is also at its highest level since the survey began, Deloitte said. The top priority for financial officers this year is expansion, whether by introducing new products or services as well as moving into new markets. Cost control has moved further down to third on the list of priorities. Deloitte said that if 2010 was characterised by companies repairing their balance sheets and slashing costs, "then 2011 looks set to be the year in which corporates start spending again".
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