Optimistic firms plan for growth
4 January 2011 4:51am
UK financial officers have turned markedly more optimistic about growth in 2011, fuelling hopes that the private sector will be able to compensate for a retrenching public sector.
Deloitte’s quarterly CFO Survey – released today – cites expansion as the top priority for financial officers, with balance sheet rebuilding and cost-cutting taking a back seat.
Risk appetite, recruitment and capital spending are also set to rise after a strong fourth quarter of 2010. The survey highlights the potential of overseas expansion for UK Plc, with 34 per cent of respondents arguing that emerging markets would contribute most to revenue growth, against 39 per cent saying the UK would.
“The focus on emerging markets shows how international the top end of the UK corporate sector has become,” Ian Stewart, Deloitte’s chief economist, told City A.M. “The UK is still the single biggest contributor, but I’m surprised to discover how closely behind emerging markets now are.”
CFOs now see a probability of just 26 per cent of a double-dip recession, down from 34 per cent in the third quarter and 38 per cent in the second.
“The equity markets late last year were very strong, and they’re usually a good barometer for more general market sentiment,” said Stewart. “It means that fears about the consequences of fiscal policy in the UK have a more positive macroeconomic backdrop.”
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