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Financial officers believe future looks promising

FINANCIAL optimism is at its highest level for two years, according to a new survey of chief financial officers by Deloitte released today.<br /><br />But while those polled are full of optimism for their own companies, they do not foresee a strong recovery throughout the sector.<br /><br />Growth next year is expected to remain sluggish by 73 per cent of respondents, and predicted to contract by 12 per cent.<br /><br />Only 14 per cent expect a return to normal or trend growth rates, and a new era of debt reduction and financial caution is forecast.<br /><br />&ldquo;While the economic outlook has improved, chief financial officers remain cautious,&rdquo; said Margaret Ewing, Deloitte vice chairman. &ldquo;Many more chief financial officers plan to reduce debt over the next year than raise it.&rdquo;<br /><br />Companies will run higher levels of cash or liquid reserves and rely more on corporate bond finance and less on bank borrowing, as the downturn leaves a lasting legacy on balance sheets, the survey found. Attractive valuations and improved access to capital now mean 39 per cent of chief financial officers believe that their companies will buy this year.