Optimism among chief financial officers at UK companies has reached a post-Brexit referendum high, according to a widely-regarded survey, with risk appetite rising and attitudes towards expansionary measures warming.
The number of finance chiefs who are optimistic about prospects for their company has risen to 31 per cent, according to the Deloitte CFO Survey, from 27 per cent in the final quarter of last year.
This represents a massive rise since the result of the Brexit referendum was announced, when only three per cent felt any optimism, and is the highest level since the second quarter of 2015.
“Brexit still tops the risk list, although at a lower reading than the last two quarters,” said Deloitte chief UK economist Ian Stewart. “Crucially, two longstanding sources of risk – concerns about weakness in emerging markets and the euro area – have fallen significantly.”
Risk appetite also seems to be climbing, with more than a quarter of respondents to the survey saying that now would be a good time to take risk on to their balance sheets. Yet this remains stubbornly below the 51 per cent who gave the same answer a year before the referendum.
The outlook is also improving for business expansion, with an increasing number of finance chiefs prioritising capital expenditure and the introduction of new products and services.
Conservatism surrounding hiring is reducing, as a third of chief financial officers say Brexit would slow their hiring activity compared to 66 per cent following the vote.
“It is clear from this survey that the UK corporate sector enters the negotiation phase of Brexit in far better spirits than seemed likely,” said Deloitte senior partner and UK chief executive David Sproul.
However, the majority of respondents – 60 per cent – still believe the UK’s business environment will be worse when the time comes to leave the EU.
Source: City A.M.