There is a growing sense of optimism amongst UK chief financial officers, according to new research.
The latest quarterly CFO survey by Deloitte suggests that most only expect sluggish growth, a strong focusing on cost control and tight lending conditions.
The survey found 73 per cent of the CFOs surveyed expected a recovery to unfold in 2010, whereas 23 per cent were expecting no returns on growth until 2011 and just over half predicted no revival until at least next year.
“It seems that some optimism is returning, but nobody is getting carried away,” said Richard Edwards, Deloitte Midlands practice senior partner in Birmingham.
“The survey shows that CFOs believe that conditions for UK corporates will remain tough even as the economy recovers and it will be a very different environment going forward. CFOs don’t see a return to the robust growth of late 2006 and early 2007.
“With CFOs assuming that growth will be weak and cost reduction a priority, it is unsurprising that 85 per cent think unemployment will continue to rise through at least the first year of recovery.”
Bank borrowing is currently out of favour, according to the survey, despite the slight improvement seen in credit availability. Another finding was that issuing equity and corporate bonds had reached its highest level since the survey’s beginning two years ago. Equity proved to be the most favoured form of finance while bank borrowing was the least popular - an entire reversal of circumstances between 2007 and 2008.
Mr Edwards added: “The end of the credit boom has caused a big shift in the way in which corporates plan to finance their businesses, with CFOs increasingly looking towards equity and bond markets for finance. The strong message from this survey is that CFOs think debt reduction has further to run.”