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UK CFOs gear up for a stronger recovery, as business sentiment hits new high

  • Optimism among business leaders at record level;
  • Upsurge in hiring and capital expenditure expected as uncertainty, Brexit and pandemic risks recede;
  • CFO opinion on Brexit’s long-term negative impact remains unchanged, despite disruption fading;
  • Finance leaders think majority of workers will return to the office in Q3 2021;
  • Technology transformations key to hybrid working.

Deloitte’s UK CFO Survey Q1 2021, released today, reports a record level of business optimism amongst the UK’s finance leaders. CFOs anticipate a strong recovery in profits over the next twelve months, with profit expectations back to the previous high seen in mid-2014 at the top of the economic cycle. A brighter backdrop has tilted companies away from defensive strategies, such as cost control, while expectations for hiring and investment have reached their highest levels in nearly six years.

Conducted between the 17 and 30 March 2021, Deloitte’s latest quarterly CFO Survey captured sentiment amongst the UK’s largest businesses at the height of the third lockdown. The latest survey saw 100 CFOs participate, including CFOs of 21 FTSE 100 and 42 FTSE 250 companies. The combined market value of the 69 UK-listed companies that participated is £547 billion, approximately 22% of the UK quoted equity market.

Deloitte’s research comes as the UK further eases lockdown restrictions, enabled by the initial success of its mass vaccination programme. Progress in tackling the pandemic is reflected in a sharp decline in the number of CFOs rating external financial and economic uncertainty as high or very high (Q1 2021: 46% versus Q4 2020 71%).

The pandemic is now seen as having a less negative effect than previously feared. The proportion of CFOs who think the pandemic will reduce capital spending in the next three years has dropped from 65% last summer to 19% in Q1. The proportion expecting the pandemic to reduce hiring has fallen from 74% to 29%, over the same period.

Impact of Brexit

The research suggests that CFO perceptions of economic uncertainty around Brexit have plummeted from the record levels seen a year ago. The successful rollout of vaccines in the UK, the prospective re-opening of the economy and a gathering US recovery have all helped.

Close to 10% of the surveyed CFOs have experienced significant or severe disruption to their businesses due to Brexit. However, CFOs believe that such disruptions will fade, with only 3% expecting significant or severe levels of disruption in a year’s time. CFOs continue to think Brexit will negatively impact the UK business environment in the long term. However, with the UK’s departure from the single market and customs union the issue has dropped sharply down CFOs’ worry list, from the first or second place it has occupied since the referendum, to seventh.  Brexit has weighed heavily on CFOs’ hiring, investment and M&A activities since the EU referendum, but such concerns have fallen away significantly since the end of last year.

CFOs continue to see the pandemic as posing the greatest risk to business, but even here concerns have eased. The only category of macro risk where concerns have risen sharply relates to the side effects of strong growth, in the form of inflation and asset price bubbles.

Ian Stewart, Deloitte’s chief economist, says: “Brexit has been a significant dampener on business activity in the last four years but with the UK’s final departure from the EU, such effects are fading. Combined with a successful vaccine rollout and a greatly improved global backdrop we are seeing a turbo-charged surge in business optimism. 

“Having come through the deepest downturn in 300 years UK businesses are firmly focussed on growth. Pent-up business and consumer demand are set to power a strong profits recovery, one already anticipated by the surge in equity markets since February.”

Return to the office

In this latest quarter’s research, 67% of CFOs now think the bulk of their firm’s employees will return to the office by Q3 2021.

Dan Barlow, Managing Partner for Deloitte’s regional business in the UK and Thames Valley lead comments: “Business leaders are looking to combine the benefits of office working – from collaboration to innovation – with the flexibility of remote working. Technology transformations like artificial intelligence, virtual reality and the cloud will play a big part in supporting this hybrid working model.

“Looking more broadly, it’s encouraging to see such a marked increase in sentiment amongst CFOs. The focus now needs to centre on expanding capacity and improving supply chains so that pent-up demand can be successfully met. Making the most of the long-term transformations sparked by the pandemic will be key to the future recovery of businesses and the economy.”

About Deloitte’s CFO Survey

This is the 55th quarterly survey of Chief Financial Officers and Group Finance Directors of major companies in the UK. The 2021 first quarter survey took place between 17 and 30 March. 100 CFOs participated, including the CFOs of 21 FTSE 100 and 42 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 69 UK-listed companies surveyed is £547 billion, or approximately 22% 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



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