UK enterprise CFOs enter new year in chipper mood

Fears over micro and macroeconomic business issues have eased considerably in past year, Deloitte report finds

UK enterprises are entering the new year in considerably more buoyant mood than they were a year ago, according to research from Deloitte.

The auditor's quarterly CFO Survey quizzed the finance chiefs of 112 big firms and found that concerns about margins, credit and cashflow have eased greatly since the beginning of 2012. The cost of credit is reportedly at its lowest point for five years and just four per cent of CFOs consider the cost and difficulty of obtaining finance a major worry.

The Deloitte report also finds businesses have a high level of confidence in the financial and employment policies of the coalition. Some 81 per cent of respondents feel the government's monetary policy is appropriate for the long-term health of the economy, while 76 per cent say the same of labour market policies.

However, there is less confidence in immigration (20 per cent), energy (19 per cent) and infrastructure (16 per cent) policies.

Fears of a eurozone break-up have been allayed in the past 12 months, with the probability of this happening in 2013 currently rated at 22 per cent, compared with 37 per cent a year ago.

Ian Stewart, chief UK economist at Deloitte, claimed that UK plc has "a greater focus on cost control and cashflow than at any time in the past two years". But he sounded a note of caution about the mid-term growth outlook for the enterprise sector.

"The emerging picture is of businesses that are constrained by low growth and uncertainty rather than weakness in business models or access to capital," he said. "While CFO sentiment yo-yoed in 2012, largely in response to the ups and down of the eurozone, corporate strategies have become steadily more defensive over the past year. By and large, big corporates do have the firepower to hire and invest.

"However, five years on from the onset of the financial crisis, the missing ingredient – and the one which holds the key to corporate behaviour – is confidence about future growth."