Deloitte's latest CFO survey found that chief finance officers are now focusing more on cost reductions than at any other time in the past nine years. They are also more negative about the effects of Brexit on their own hiring and spending decisions.
Companies are tightening spending and scaling back on recruitment, and their appetites for capital expenditure, M&A activity and launching new products and services have reduced, according to Deloitte's latest CFO survey. In addition, approximately 80 per cent of CFOs told Deloitte that they expect the long-term business environment to be worse as a result of leaving the EU.
More than half of CFOs said that hiring will slow over the next three years, while 49 per cent also said that their capital expenditure will slow, an increase from 44 per cent in Q3 last year.
This survey shows that uncertainty over Brexit is driving a marked shift towards defensive balance sheet strategies among British businesses," said Ian Stewart, chief economist at Deloitte. “With the UK’s growth prospects heavily dependent on the so far uncertain nature of its exit from the EU, corporates are cutting back on capital expenditure and hiring, focusing instead on cost reduction.
He added that companies are positioning themselves for "the hardest of Brexits". Risk appetite is at "recessionary levels" and they are focusing "intensely" on cost control. "Businesses seem to be increasingly pricing in a worst-case outcome. Anything better, including a delay or a deal, could deliver a Brexit bounce in sentiment,” he said.
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