Press releases

Deloitte European CFO Survey: Politics dominates business worries

11 May 2016

  • Uncertainty rises and risk appetite falls amid political uncertainties 
  • CFO optimism about company prospects remains static, cost control dominates future plans
  • Eurozone employment outlook improving

The political environment continues to worry chief financial officers (CFOs) according to Deloitte’s latest European CFO Survey.

Perceptions of uncertainty have risen, cost control remains a top business priority and appetite for risk is diminishing. Despite these uncertainties, CFOs, particularly in the eurozone, remain optimistic on the outlook for hiring.

Deloitte has collated the results of surveys run by its member firms in 17 European countries for the Q1 2016 European CFO Survey, giving the views of 1,490 CFOs.

Stable financial prospects
25% of CFOs say they are more optimistic about the financial prospects for their company than they were three to six months ago, unchanged from the third quarter of 2015. CFOs in Sweden were the most optimistic, with 62% more positive.

Spain (47%) and Ireland (45%) report the second and third highest levels of optimism but both have declined, perhaps influenced by inconclusive elections. Portugal, also seeing internal political stalemate, saw the largest drop in sentiment across all countries, down from 47% in Q3 to 30%.

However, CFOs remain upbeat about their companies’ revenues, with 63% expecting revenues to increase over the next 12 months.

Uncertainty continues to rise
68% of European CFOs say there is a high level of financial and economic uncertainty facing their business, up from 66% in Q3. Perceptions of uncertainty are highest in Germany, with 93% of CFOs reporting high levels of uncertainty, followed by the UK (83%) and Russia (72%). The lowest levels of uncertainty are seen in Norway, where 24% report high uncertainty, Sweden (37%) and Belgium (49%).

With closely contested elections recently, large rises in business uncertainty were seen in Spain (52% to 66%) and Ireland (39% to 52%). Uncertainty in the UK has also risen (73% to 83%) as it heads towards its referendum on EU membership.

CFOs in Germany, Portugal, Turkey and the UK cited national and international political factors as their top concerns.

Risk appetite falls
Just 29% of CFOs say now is a good time to take risk onto their balance sheets, down from 33% in Q3. Risk appetite is slightly higher in the eurozone, where 32% are willing to take on risk. Appetite is highest in Italy, where 59% say now is a good time to take risk, and lowest in Turkey (6%).

Mirroring rising uncertainty and recent political developments, the UK saw the largest fall in risk appetite (25%, down from 47%) with sharp falls in Ireland (39%, down from 48%) and Portugal (15%, down from 31%) and a marginal drop in Spain (46%, down from 47%, but still second highest).

Improving employment outlook
39% of eurozone CFOs are forecasting employment increases, up from 35% in Q3 and ahead of an overall average of 34%.

Ireland leads the way on hiring, with 68% of CFOs forecasting an increase in job numbers (up from 55% in Q3), followed by Italy (54%, up from 43%) and Spain (46%, unchanged). The UK saw the largest decline around hiring expectations, where 18% of CFOs plan to increase hiring, down from 47% in Q3.

Cost control favoured over investment
CFOs strongly favour defensive business strategies over expansionary ones. For 15 out of 16 countries cost control or cost reduction was a top two priority when asked what strategies their business will be focusing on in the coming 12 months.

36% of CFOs (and 42% eurozone CFOs) say they expect their company to increase capital expenditure in the next 12 months, down from 41% in Q3. Despite a decline in the last six months, Ireland’s CFOs are most willing to spend, 63% down from 70%, followed by Italy (62%, up from 58%) and Poland (57%, up from 48%). The UK has the weakest outlook for capital expenditure, with just 16% of CFOs willing to spend, down from 41% in Q3, the sharpest fall across all countries.

Bank borrowing preferred source of finance
67% of CFOs say that bank borrowing is an attractive source of funding for their companies, up from 65% in Q3, 42% rate corporate debt as attractive, down from 48%, while just 22% say equity is a good source of funding, down from 25%.

CFOs cool on TTIP
CFOs were asked if their company will be affected by the formation of a Transatlantic Trade and Investment Partnership deal between the EU and United States. 73% said a deal would have no impact on their business, with 23% predicting it would bring advantages.

David Sproul, senior partner and chief executive of Deloitte UK, said:
“Europe’s CFOs are in a cautiously optimistic mood, but sensitive to a number of headwinds. Rising perceptions of external uncertainty have seen risk appetite fall and increasing pressure on operating margins and revenues. Amidst this uncertainty, firms are continuing to prioritise cost control, but this has not been at the expense of hiring plans.”

Ian Stewart, chief economist at Deloitte UK, said:
“Europe entered 2016 with a number of political and geopolitical risks that could threaten growth, confidence and political unity. Internal politics has been a destabilising influence in Spain, Ireland and Portugal, where closely contested elections led to a political stalemate in recent months, and the UK has seen rising uncertainty ahead of its referendum on EU membership.

“The resilience of hiring plans in the face of these uncertainties show CFOs expect Europe’s recovery to roll on. In a sign that the recovery is spreading from Europe’s centre, hiring plans are strongest in those countries that saw the largest rises in unemployment after the financial crisis.

“Europe’s economy has benefited from ultra-loose monetary policy, sharp falls in unemployment and rising real incomes. So far, political risks have not knocked Europe’s recovery off course but the evidence of recent years is that sustained uncertainty acts as a brake on growth.”


Notes to editors

This is the third biannual Deloitte European CFO Survey.

The Survey collates the findings of surveys conducted by Deloitte member firms in Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey and the United Kingdom.

Sweden and Turkey are new additions for the Q1 Survey.

In total, 1,490 CFOs took part in these surveys, conducted between January and March 2016.

Percentages used in the report are weighted by GDP to provide accurate comparisons, taking into account individual countries’ GDPs in relation to the total GDP of the 17 participating countries.

The full survey results, including country-by-country breakdowns, and previous surveys are available to view at

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

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

Member of Deloitte Touche Tohmatsu Limited.

Mark Smith
Deloitte LLP
+44 (0) 20 7007 7082
+44 (0) 75 9004 1301

Did you find this useful?