Top companies readying plans for expansion
The UK’s largest companies are planning to loosen their purse strings and fund expansion plans according to a survey of top finance chiefs published today.
Expanding into new markets or introducing new products and services was seen as a strong priority for the next 12 months by 41 per cent of chief financial officers (CFOs), the report by financial services giant Deloitte said.
The figure marks a healthy gain on the 28 per cent of CFOs that said expansion was a priority at the start of the year.
The survey, which gauged the views of 122 CFOs from the biggest 350 UK companies, found that 66 per cent of them expect UK businesses to up their capital expenditure over the next year.
An uptick in hiring is expected by 70 per cent of finance bosses.
The plans are the result of a greater appetite for risk taking among major companies.
“Risk appetite is on the rise, uncertainty has fallen and CFOs enter the second half of the year in expansionary mode. Our survey suggests the UK recovery is regaining momentum,” said Ian Stewart, chief economist at Deloitte.
Interest rate hikes this year in the UK and the US, as well as a potential eurocrisis, are the biggest concerns for companies over the next 12 months.
Finance chiefs were also heavily in favour of staying in the EU, but did not rate the referendum on EU membership as a major risk.
EU membership has boosted the UK’s export performance, according to 91 per cent of CFOs. However, 57 per cent say its regulatory and compliance rules are a burden for businesses. Overall, finance chiefs are optimistic on the scope for reforming the UK’s relationship with the EU.
“CFOs are more relaxed about the referendum than they were before May, perhaps a sign they believe the vote will endorse continued membership,” said David Sproul, chief executive of Deloitte.
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