Financial officers are more confident about this year than they were about 2012, according to the Deloitte CFO Survey
The report, which surveys finance chiefs from 112 companies including 36 FTSE 100 and 38 FTSE 250 businesses, found that corporates see credit as the cheapest its been for five years.
Only 4% of CFOs and finance directors surveyed cited the cost of and difficulty in raising finance as being major worries for their businesses.
Deloitte said that 22% of CFOs believe a euro break-up is probable, compared with 37% a year ago, with 81% of CFOs believing that monetary policy is appropriate for the long-term success of UK businesses.
Regulation, infrastructure and energy and immigration are the biggest policy areas of concern for large British businesses. Most major companies think the Bank of England is doing a good job, and the respondents were also positive about the UK’s labour market policies.
Ian Stewart, chief UK economist at Deloitte, said, “Despite expectations of a weak recovery in 2013, large companies enter the New Year with a greater focus on cost control and cash flow than at any time in the last two years. The emerging picture is of businesses which are constrained by low growth and uncertainty rather than weakness in business models or access to capital. Despite confidence fluctuating with the ups and downs in economic prospects, we’ve seen a long term drift to greater defensiveness by corporates not for want of capital but rather for scarcity of opportunity.
“The dominant concern of UK businesses for 2013 is the economy, just as it has been at the start of each of the last four years. Confidence has returned, but perceptions of economic and financial uncertainty remain high and the greatest worries for CFOs are still the weakness of the euro area and UK economies.
“Yet corporates 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 the upward escalator of steady growth to lift revenues. They have to work harder for, and carefully judge, the risks of expansion.”
The combined market value of the 84 UK listed companies surveyed is £672bn, or approximately 35% of the UK quoted equity market.
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