Big business optimism returns

UK Futures

June 2013

Will 2013 be a turning point for UK business? Major firms based in the UK plan to invest over £13 billion during 2013 in growth related initiatives, with two in three senior executives viewing the next three years as a period of growth for their business.

Key findings

  • Big business plans to invest £13 billion in growth strategies in 2013.
  • 80 per cent of board directors and senior executives believe they are now best placed to lead a new era of wealth creation.
  • Confidence is high, with nearly 40% of big businesses expecting to be a global leader (top 3 worldwide in their industry) in the next five to ten years.

Executive summary

The long-term wealth creation prospects of the UK are likely to be significantly influenced by big business. Deloitte analysis suggests that big business could be the catalyst to kick-start wider business investment across the UK economy.

Much has been said about the cash piles generated by large firms over the last several years with the total now estimated at £708 billion. After a period of caution, our analysis shows that 80 per cent of senior executives believe that business leaders are best placed to lead a process of wealth creation.

What is important to wealth creation is the return of investment confidence. Our research shows encouraging news on two fronts.

First, big businesses based in Britain have plans to invest to drive growth. Based on Deloitte estimates, more than 60 per cent plan to make investments greater than £50 million in 2013. Only 10 per cent of companies in this category said they had no investment plans, and of the remaining 30 per cent, three-quarters plan to make investments on a similar scale within two years.

Second, UK-based businesses are confident of future success, in spite of the intensity of international competition. Over two-thirds of firms (70 per cent) expect to be either a global leader (top three worldwide) or an international company (with more than 50 per cent of revenues flowing from foreign markets) within the next five to ten years.

UK big business also appears to have adapted to the 'new' normal. The vast majority (75 per cent) said there was a fundamental shift in the business environment over the last five years. The evidence provided here suggests we have reached a turning point in major firms' confidence, echoing the results of the latest Deloitte CFO Survey.

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