Eurozone business confidence crumbles as bosses grapple with economic uncertainty
The vast majority of European chief financial officers (CFOs) continue to consider the current level of financial and economic uncertainty as high or very high, a new survey shows.
Uncertainty is now higher in the euro area, increasing to 65 per cent in the last six months from 62 per cent, in contrast to the non-eurozone which had a four per cent drop to 61 per cent.
UK finance bosses gave the highest rating of uncertainty with 96 per cent rating it as high, while financial officers in Norway had the lowest at 17 per cent, according to the survey of 1,473 CFOs by professional services firm Deloitte.
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UK finance chiefs were also among the most negative about the financial prospects for their company, with a net balance of -24 per cent, the second-most negative in Europe after Iceland, although that marked an improvement of six percentage points on six months previously.
Risk appetite remains low with only 20 per cent of CFOs thinking it is a good time to take risk onto their balance sheets, the lowest level since the bi-annual survey began in spring 2015.
This remains unchanged for non-euro countries but marks a seven per cent drop for those within the euro area.
Sentiment in the euro area has deteriorated compared to a year ago, with a greater number of CFO’s considering a new Eurozone crisis is likely within the next 12 months.
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Forty-one per cent of non-euro CFOs say this is likely, up from 34 per cent a year previously, but 46 per cent of euro area CFOs say this is likely, a significant increase from 27 per cent 12 months previously.
Ian Stewart, chief UK economist at Deloitte, said: The slowdown in the euro area has come faster than expected and has knocked sentiment among the region’s largest corporates. The majority of businesses aren’t expecting a recession, but they are pulling back from hiring and are closely focused on the risks to growth.”
Separately, a survey on the levels of preparation businesses had made for the European elections by FTI Consulting found that emotions rather than economic issues are driving voter choice in France, Germany and Spain in more than half of cases.