Press releases

CFOs predict business demand will not recover until after Q2 2021

19 October 2020

  • CFOs are pushing back the ‘return to normal’. Almost two-thirds (62%) do not expect demand for their own businesses to recover to pre-pandemic levels until after Q2 2021 
  • Despite uncertainty the majority of CFOs expect to take back furloughed staff, with an average of 82% of employees expected to remain on payrolls 
  • Even a limited Brexit trade agreement would significantly reduce the shock to business activities from a no deal Brexit 
  • Business transformation is the number one area for business investment in the next 12 months, with a focus on areas such as digitisation, automation and streamlining

Finance leaders continue to rank the effects of the COVID-19 pandemic as the top risk to their businesses, followed by rising geopolitical issues and the effects of Brexit, according to Deloitte’s latest CFO survey. Almost two-thirds (62%) of CFOs do not expect demand for their own businesses to recover to pre-pandemic levels until after Q2 2021, up from just under half (49%) in Q2’s survey.

The Deloitte CFO survey for Q3 2020, which gauges sentiment amongst the UK’s largest businesses, took place between 22nd September and 6th October 2020.

A total of 102 CFOs participated in the latest survey, including CFOs of 21 FTSE 100 and 37 FTSE 250 companies. The combined market value of the UK-listed companies that participated is £417 billion, approximately 20% of the UK quoted equity market.

Risk appetite and economic landscape
Perceptions of external uncertainty remain elevated and well above levels seen before the pandemic, with the majority of CFOs surveyed (79%) feeling there is a high or very high level of uncertainty facing their business, in line with Q2 (80%). 

Almost two-thirds (63%) of CFOs expect inflation to remain between 0.1 - 0.5% over the next two years, up from 39% in Q2. Over half of finance leaders (57%) also expect the base rate to be maintained at 0.1% this time next year, with only 6% anticipating negative interest rates in a year’s time.

Over three-quarters of finance leaders (78%) expect UK corporates to reduce capital expenditure in the next 12 months, maintaining the sentiment seen in Q2, where the majority (86%) anticipated a decrease. The pandemic has meant businesses have made greater investment in some areas, like technology, while reducing it in others. A net balance of 64%* of CFOs say they expect to reduce their land, business buildings and workspace infrastructure investments, while 65% say they expect to increase investment in organisation and business process improvements, such as restructuring, streamlining and automation, over the year ahead.

The majority of CFOs surveyed** expect to keep the vast majority of furloughed employees on their payrolls. They expect to retain, on average, 82% of their furloughed staff after the scheme ends in October.

Ian Stewart, chief economist at Deloitte, commented: “Business leaders expect a longer haul back to pre-COVID levels of activity. With further restrictions coming into effect, businesses have scaled back expectations and are focussed on strengthening their businesses and their balance sheets. British businesses are gearing up for a long winter with COVID-19, with a full recovery on the horizon only after next summer.”

The impact of COVID-19 and Brexit
CFOs expect the negative effects of the COVID-19 pandemic to overshadow those of Brexit. Seventy-five per cent of CFOs expect the pandemic to have ‘significant’ or ‘severe’ negative effects on their businesses over the next 12 months. By contrast, 23% expect similar negative effects due to Brexit.

Finance leaders report that they will decrease hiring and capital expenditure more prominently over the next year if a Brexit ‘no-deal’ occurs. Around a third (30%) of CFOs said they would reduce hiring in the event of a no-deal, compared to 15% in a thin-deal scenario, which would ensure tariff-free goods trade only. Twenty-six per cent of CFOs said they would decrease capital expenditure in a no-deal scenario, compared to 11% in the event of a thin-deal.

Amanda Tickel, Brexit lead at Deloitte, commented: “Finance leaders are rightly rating Brexit as one of the top risks facing their business and it’s clear CFOs expect the type of exit the UK makes from the EU to make a difference to business activity. With less than 75 days to the end of the transition period, we expect businesses to accelerate the implementation of their Brexit plans in the next few weeks, with a particular focus on the interplay between Brexit and COVID-19.”

Strategy and spending
Over the next 12 months, CFOs continue to rank defensive balance sheet strategies highly with 57% and 48% respectively rating reducing costs and increasing cash flow as strong priorities.

Richard Houston, senior partner and chief executive of Deloitte UK, said: “While expansionary strategies remain on the back burner, it’s encouraging to see that staff retention is still a priority for business leaders.

“Facing a combination of COVID-19 and Brexit, businesses need to find ways to adapt and transform. Investment in technology, innovation and skills will be a critical factor in their recovery from this crisis.”  


Notes to editors

* 64% more CFOs said they expect to decrease investment in land rather than increase investment in land (the scale goes from -100 to +100 with zero meaning the same amount of CFOs are increasing investment in land as decreasing investment in land).

** Those businesses who take part in the UK CFO Survey are typically FTSE 350 public companies or private companies with at least £100m annual revenue in the UK.

About the survey
This is the 53rd quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. The 2020 third quarter survey took place between 22th September 2020 and 6th October 2020. 102 CFOs participated, including the CFOs of 21 FTSE 100 and 37 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 68 UK-listed companies surveyed is £417bn, or approximately 20% of the UK quoted equity market.

Launched in 2007, 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

Data from the Deloitte European CFO Survey Autumn 2020 - due to be released on Thursday 22 October
Since 2015, Deloitte has also conducted the European CFO survey. The data for the Autumn 2020 edition was collected from 22nd August – 5th October 2020, and garnered responses from 1,578 CFOs in 18 countries. According to finance leaders across Europe, half report to feel more optimistic than three months ago about the financial prospects for their company – five times as many as in March. The picture is mixed across the 18 countries: for example, while two-thirds of CFOs in Denmark and more than half of CFOs in Germany foresee a full recovery of their revenue capacity by the end of 2020, only 25% of the CFOs in Switzerland and 21% of the CFOs in the UK expect this. Full results can be found at from Thursday, 22nd October.

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 NSE 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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