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Deloitte CFO Survey: Post-election dip in business confidence

10 July 2017

  • Uncertainty rises and risk appetite dips among UK CFOs
  • Brexit and UK growth top list of CFO concerns
  • CFOs remain on defensive footing, prioritising cost control and cash flow
  • Sentiment and risk appetite remain above levels seen last summer

Optimism among UK businesses has fallen and concerns about the impact of Brexit have risen, according to Deloitte’s latest CFO Survey.

122 CFOs of FTSE 350 and other large private companies participated in the Q2 2017 CFO Survey. The combined market capitalisation of the 92 listed companies who participated is £509bn, approximately 20% of the UK quoted equity market.

The survey ran from 12th to 27th June, capturing the immediate business reaction to the 2017 General Election result.

Optimism and risk appetite dented
42% of CFOs say they are less optimistic about the prospects for their company then they were three months ago, up from 17% last quarter. 18% of CFOs say they are more optimistic, down from 31% in Q1.

43% of CFOs say that the level of uncertainty facing their business is high or very high, up from 34% last quarter, and 22% say now is a good time to take risk onto their balance sheets, down from 26% in Q1.

However sentiment and activity indicators from this quarter’s survey are higher than they were in the immediate aftermath of the referendum.

CFOs sharpen focus on defensive strategies
Among defensive balance sheet measures, 36% of CFOs say that increasing cash flow is a strong priority for the coming 12 months, up from 34% in Q1, while 46% say they will focus on cost control, up from 42%.

On expansionary measures, 17% say they plan to increase capital expenditure, down from 22% in Q1 and 42% plan to introduce new products and services, up from 41%.

Looking across the corporate sector as a whole, 43% of CFOs say they expect hiring to decrease in the next 12 months, up from 28% in Q1, while 32% expect a slowdown in capital spending, up from 22%, and 55% expect discretionary spending to slow, up from 38%.

CFOs more downbeat on Brexit
72% of CFOs say the business environment will be worse when the UK leaves the EU, up from 60% in the previous quarter and the highest level since the referendum. Just 8% say the business environment will be better as a result of Brexit, the lowest level recorded.

This quarter’s survey also saw increases in the proportion of CFOs saying Brexit will have a negative effect on their own corporate spending. 38% say Brexit will negatively impact hiring, up from 30% in Q1, while 33% say it will slow capital expenditure, up from 26%.

Domestic concerns top CFOs risk list
Concerns about domestic risks have risen up the agenda for CFOs, with worries about geopolitics and global growth reducing.

Brexit remains the biggest risk CFOs say their business faces, followed by weak demand in the UK. When asked to rate risk factors on a scale of 0-100, the effects of Brexit are rated at 60, rising from 55 in the last quarter, with UK demand up to 57 from 51.

Meanwhile, weakness in the euro area fell to 39 from 40 in Q1, and 52 in Q4 2016, while weakness in emerging markets fell to 32 from 35.

Ian Stewart, chief economist at Deloitte, said:
“Business sentiment has been on a rollercoaster in the last 18 months, slumping in the aftermath of the referendum, staging a strong recovery and then falling again in the wake of the general election.

“This latest dip likely reflects the surprise outcome of the election, so a drop in confidence is understandable. CFOs are also more focused on the prospect of slower UK growth. What is striking from this survey is that concerns around geopolitics and weak global growth, which dominated CFOs’ concerns in 2015 and 2016, have eased significantly.

“This survey ran at a point of high political uncertainty and it is worth noting that sentiment and risk appetite are still well above the levels seen last summer. Favourable financial conditions and an improving global backdrop are also helping to support business at a time of rising domestic uncertainties."

David Sproul, senior partner and chief executive of Deloitte North West Europe, said:
“Despite the outcome of the general election causing speculation about whether we could see a closer long-term relationship between the UK and EU, CFO’s concerns about Brexit have grown. More CFOs now see Brexit slowing business investment and hiring, as well as an overall weaker business environment once the UK leaves the EU.

“Business sentiment is highly sensitive to political developments and surprises. The outcome of the General Election, like the result of last June’s EU referendum, was hugely unexpected and has knocked optimism. A period without such large shocks, and with the negotiations with the EU gaining direction and momentum, should help bolster business sentiment.

“Nonetheless, this underscores the importance of the Brexit negotiations producing a favourable environment for UK businesses, with access to the skills and markets they need for their future success. Business and government must work closely together to achieve this.”


Notes to editors

About the Deloitte CFO Survey
This is the 40th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK.

The 2017 Q2 survey took place between 12th and 27th June 2017.

122 CFOs participated, including the CFOs of 22 FTSE 100 and 54 FTSE 250 companies. The rest were CFOs of other UK-listed companies, large private companies and UK subsidiaries of major companies listed overseas. The combined market value of the 92 UK-listed companies surveyed is £509 billion, approximately 20% of the UK quoted equity market.

The Deloitte CFO Survey is the only survey of major corporate users of capital that gauges attitudes to valuations, risk and financing.

For copies of previous CFO Surveys, please visit

About Deloitte
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit

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