Economic outlook & predictions of Europe’s CFOs

European CFO Survey: Spring 2021

What are the economic prospects for 2021? Is the economy in recovery? Can we expect economic growth in 2021? And what’s next for European businesses?

With strict lockdown measures still in place across many European countries, lingering high levels of COVID-19 infections and a relatively slow pace of vaccinations, it would be easy to be gloomy about European economic prospects. However, CFOs across Europe have shared their views in the thirteenth edition of the European CFO Survey, and their predictions are positive. A new wave of optimism and a renewed willingness to invest is prevalent across Europe, with many companies turning the page on COVID and focusing on the post-pandemic reality.
 

Business sentiment in Europe: financial outlook for 2021

• In every country and sector surveyed, more CFOs feel more optimistic about their company’s financial prospects than less optimistic, giving a positive net balance that is at its highest level since the beginning of the European CFO Survey series. 
  

• Even sectors hit hardest by the pandemic expect revenues to increase. Forty-three per cent of businesses report to have already returned to their pre-pandemic level of revenue generations and another 24 per cent expect to do so by the end of the year.
• Expectations are particularly low in the tourism sector where no one has already returned to pre-pandemic levels and only 15 per cent expect to do so by the end of this year. At the other end of the spectrum, three-quarters of CFOs in the financial sector say they are already at pre-crisis levels or expect to be by the end of the year.
  
  

Economic recovery in a post-pandemic era: time to thrive

• Two in three CFOs report that they are already preparing for and shaping their post-pandemic future – what we define as the “thrive” phase. Only 14 per cent feel they are still in survival mode
  

• The positive mood is widespread although there are substantial differences across industries: life sciences and health care and retail being among the most bullish, with transport, tourism and travel still a way to go.

An increase in investment and a focus on employment

• CFOs remain concerned about a possible weakening in demand and about the overall state of the economy and its recovery, but their investment intentions have surged to levels not seen since March 2018. New demand related to workers’ and customers’ safety, an increase in digital interactions but also a renewed focus on environmental issues means that future investment levels are likely to be higher than in the past.
• The outlook for employment is positive across all industries – even those worst hit by the pandemic – and is at its second highest level since the beginning of the series in 2015. These positive signals on employment are extremely welcome as the COVID-19 pandemic has taken its toll on workers – especially women and young workers.

Resilience in the face of adversity

The world has suffered terrible losses, with mobility restrictions and heightened uncertainty ever present. The strength of any recovery depends on the ability to bring the virus under control, and even if growth returns, businesses will be operating in a profoundly different world. But the outlook for the coming months does look brighter - CFOs all over Europe are looking at the future with renewed, collective confidence and a keen awareness of the wider risks and issues that will influence the coming years: from rising geopolitical tensions and the challenges posed by climate change, to the growing awareness of social issues or the complexities of new working models and forms of interaction. In this regard CFOs have an important role to play, providing the information and tools that can enable companies to take sound decisions.

Read the full report to understand the economic prospects for Europe through the eyes of leading CFOs.

About the European CFO Survey

Since 2015, Deloitte has conducted the European CFO survey, giving voice twice a year to senior financial executives from across Europe, providing an overview of business sentiment and expectations for investments and hiring. The data for the Spring 2021 edition was collected in March 2021 and garnered responses from 1,559 CFOs from a wide range of industries in 19 countries: Austria, Denmark, Finland, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the UK.

Previous editions

European CFO Survey - Autumn 2020
More K than V: a patchy recovery

European CFO Survey - Spring 2020
A perspective on COVID-19

European CFO Survey - Autumn 2019
Into the woods

European CFO Survey - Spring 2019
Eyes on demand

European CFO Survey - Autumn 2018
Winter is coming

European CFO Survey - Spring 2018
Undeterred by uncertainty

European CFO Survey - Autumn 2017
CFOs switch focus to the longer term

European CFO Survey - Spring 2017
Recovery continues

European CFO Survey - Autumn 2016
Growth prospects in an uncertain world

European CFO Survey - Spring 2016
Politics takes centre stage

European CFO Survey - Autumn 2015
Confidence heads South