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Deloitte: UK CFOs focused on growth in 2018

Jan 10
Tags: Deloitte
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Deloitte: UK CFOs focused on growth in 2018

Chief financial officers (CFOs) at large UK businesses have made business growth one of their top priorities for 2018, despite widespread recognition of the importance of cost control.

That is one of the key findings in Deloitte's Q4 2017 CFO Survey, which sought the views of 112 finance leaders from FTSE 350 and other big private companies.

Just over half (51 per cent) of the respondents said reducing costs will be a key priority for their organisation during the coming year, but achieving growth is also on the agenda.

Indeed, the survey results showed that the importance CFOs attach to expansion is at its highest level since the question was first asked in 2009. That growth could be realised organically, through acquisitions, by introducing new products or services, or by moving into new markets.

David Sproul, senior partner and chief executive of Deloitte in north-west Europe, said: "Encouragingly, far from backing away from growth as they did in previous periods of uncertainty, CFOs are putting more emphasis on expansion.

"It seems that an accelerating global economy is helping to counter the effects of uncertainty close to home."

On the issue of uncertainty and potential business challenges, the report revealed that Brexit still tops the list of worries for CFOs. Ranking their level of concern on a scale of 0-100, respondents gave Britain's impending exit from the European Union a score of 62, up from 58 in the previous quarter.

Weak demand in the UK (59) is another common cause of uncertainty, followed by sluggish productivity (49).

Nearly four out of ten business finance leaders (38 per cent) said there is a high level of uncertainty currently facing their organisation. This proportion is up slightly from the third quarter of 2017 (35 per cent), but significantly lower than a year earlier (50 per cent).

Ian Stewart, chief economist at Deloitte, stressed that, despite the various possible risks and obstacles facing UK businesses going into 2018, there remains a degree of underlying optimism among executives.

"CFOs enter 2018 more focused on controlling costs than at any time in the last eight years. Despite this, CFOs are more optimistic today than they have been in the last two years and perceptions of uncertainty are far lower than during the euro crisis and following the EU referendum," Mr Stewart said.

Other key findings from the research showed that less than one in six finance bosses (15 per cent) expect interest rates to remain at their current level of 0.5 per cent throughout this year. A substantial majority (85 per cent) of respondents said rates are likely to be at least 0.75 per cent by the start of 2019.

Nearly a fifth (18 per cent) of CFOs said they were more optimistic about business prospects than they were three months earlier, which is higher than the average figure recorded over the past two years.

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