‘Long haul back’ to pre-cri­sis in­vest­ment lev­els

The Daily Telegraph - Business - - Business - By Tom Rees

FI­NANCE chiefs are brac­ing for a “long haul back” to pre-virus lev­els of busi­ness as the coun­try’s big­gest firms plan to slash in­vest­ment and hir­ing.

Half of com­pa­nies do not ex­pect ac­tiv­ity to re­cover to lev­els seen be­fore the pan­demic un­til at least the se­cond half of 2021 as most move to shore up their fi­nances, Deloitte’s quar­terly sur­vey of chief financial of­fi­cers found.

While sen­ti­ment im­proved marginally from the first quar­ter, the ma­jor­ity are brac­ing for a slump in rev­enue and a drop in spend­ing as hopes of a rapid V-shaped re­cov­ery fade.

Around nine in 10 plan to re­duce hir­ing and in­vest­ment, while 78pc ex­pect rev­enue to fall in the next 12 months, the se­cond worst read­ing on record. More than half plan to re­duce costs to help re­pair bal­ance sheets, ac­cord­ing to the sur­vey, which in­cluded FTSE 100 and 250 fi­nance direc­tors.

Ian Ste­wart, the chief econ­o­mist at Deloitte, warned com­pa­nies were “ex­pect­ing a long haul back”.

A ris­ing num­ber of man­u­fac­tur­ers have warned they are plan­ning to cut jobs. Make UK, the in­dus­try body, called on the Gov­ern­ment to ex­tend the fur­lough scheme for strate­gic sec­tors af­ter find­ing that half of fac­to­ries planned to make re­dun­dan­cies in the next six months.

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