CFOs of the UK’s largest firms are optimistic about prospects for their own businesses as they enter 2024, according to Deloitte’s latest CFO survey.
The research revealed that sentiment among finance leaders has risen for the second consecutive quarter – to well above average levels – with a net 11% of CFOs more optimistic about the financial prospects of their business than they were three months ago.
The data revealed that there is a strong consensus among finance leaders that the UK has entered a prolonged period of high labour costs. A net 92% of CFOs expect labour costs to remain elevated in the long term, relative to 2023. But CFOs are decidedly bullish on investment in new technology, with a net 63% of CFOs expecting investment in new technology to increase in the long term.
Finance chiefs also anticipate a greater role for the state in the economy, with significant proportions expecting an increase in levels of taxation (net 39%) and regulation (net 42%).
By contrast, CFOs think that levels of flexible or home working have peaked, with a net 57% expecting home working to decline in the long term.
CFOs’ balance sheet strategies remain largely defensive. Cost reduction is their top priority, with 51% of CFOs rated reducing costs as a strong priority for their business over the next 12 months. Increasing cashflow follows, with 47% of CFOs rating it as a strong priority. A sharp fall in the priority assigned to introducing new products and services or entering new markets (only 15% of CFOs say it’s a strong priority now) has driven expansionary strategies further out of favour.