Britain's finance directors are at their most confident for two years and are gearing up for expansion as concerns ease about the availability of credit and the strength of the recapitalised banking system, according to a quarterly study by Deloitte.
The survey, which takes the views of 128 finance chiefs, including 37 from FTSE-100 companies, has found that nearly half of respondents still have concerns about the economy, with many fearing a "double dip" recession before a sustained recovery takes hold.
Despite this, however, the balance of optimists against pessimists has hit a high of plus 44 – the best figure recorded in the 30-month history of the study. That compares with a low of minus 59 in the final quarter of 2008, shortly after the collapse of Lehman Brothers.
The study also found that 78 per cent of finance directors had confidence in the banking system's ability to sustain the recovery, and there was barely a mention among their chief concerns of liquidity problems and cashflow crises. Credit conditions, respondents said, have improved in terms of both price and availability, suggesting that banks are increasingly willing to lend to larger, well-capitalised businesses, although the debate continues over whether the banks are doing enough to help smaller firms.
Yet most finance directors still say that bank loans are expensive and comparatively difficult to obtain. They are increasingly keen on using equity and bonds as alternative sources of funding to bank borrowing. That finding suggests the wave of bond and rights issues of 2009 is poised to continue through the coming year.
Ian Stewart, the chief economist at Deloitte, said: "The views of finance directors are important because they are on the front line of dealing with the impact of the credit crisis on British companies. While they still expect a weak recovery, this suggests that the real crisis has abated.
"Their priorities still remain cutting costs and preserving cashflow but the survey suggests conditions are much closer to normal than they have been for some time," he added.