THE UK’s largest firms are readying themselves for a new era of innovation and investment as a survey of bosses says the willingness to take on risk has risen due to surging US and UK economies and easier credit availability.
Of the 118 chief financial officers of major UK companies surveyed by accountancy firm Deloitte, a net 85 per cent (the percentage who said yes minus the percentage who said no) reported an improvement in economic prospects over the last six months. The figure was 75 per cent for the US.
With regard to credit conditions, net 80 per cent said credit was cheap with same amount saying credit was also easily available.
It was not all good news, however. CFOs reported that a referendum on European Union membership, the May 2015 UK general election and economic weakness in the Eurozone are among the highest risks posed to business.
However, these were not enough to dampen business optimism which remains above its long term average and firms are putting expansion plans at the top of the agenda for the next 12 months. 35 per cent of CFOs stated introducing new products/services or expanding into new markets was a strong priority and 32 per cent had prioritised increasing cash flow.
Meanwhile only nine per cent reported that reducing leverage was a major concern and 10 per cent said share buybacks we a priority. This may signal an end to the recent era of share buybacks which occurred as firms saw more reason to give money back to shareholders instead of investing it, implying a lack of opportunity.