New Targets of CFOs Boost UK Firms’ Confidence
A survey conducted by accounting and consultancy firm Deloitte in the fourth quarter of 2010 showed escalated confidence among UK firms upon learning the new priorities set by chief financial officers (CFOs) for 2011.
According to Deloitte, most UK firms are now more ready to risk in businesses than they were prior to the 2008 global economic crisis as CFOs are now targeting expansion, rather than defense, either by creating new products or services or by shifting to new markets.
Among the other findings of Deloitte’s latest CFO survey, 61 percent considered locations outside of UK to more likely foster growth in revenue this year. CFOs also expressed optimism at the idea of undertaking capital expenditure and taking on new staff, Deloitte’s survey revealed.
The survey also indicated that most CFOs have the least priority on the idea of controlling costs as a means for growth.
Deloitte partner and vice chairman Margaret Ewing compared the priorities of most CFOs in the previous year to their targets set for 2011, saying 2010 “ was the year of balance sheet rebuilding and cost cutting” while 2011 “looks set to be the year in which corporates start spending again.”
Ewing added that “growth in private sector hiring and capital spending” could help foster recovery in 2011.
Of the CFOs who participated in the survey, 39 percent expected growth in UK firms to be spurred by the country while 34 percent said major contributing factor to revenue growth would be the emerging markets.
Ian Stewart, Deloitte chief economist, said overseas markets affairs could largely contribute to UK firms, adding that the survey revealed the higher level of confidence with taking on risk to be embraced by firms that earn for the most part form overseas markets than by those that focus on UK alone.
During the economic crisis, debt finance was dropped by CFOs, but now improving conditions of credit is seen by most CFOs to be another contributing factor to the increased confidence among UK firms in risk-taking, according to Deloitte. The consultancy firm added that CFOs no longer see UK firms as over leveraged following a “period of aggressive corporate debt reduction.”