Slump in confidence for finance directors
Business confidence has seen its largest quarterly fall on record, a survey of finance chiefs revealed today.
Deloitte’s latest survey of chief financial officers found that 84 per cent are less optimistic about the prospects for their company than they were three months ago. That is in stark contrast to the previous quarter where a majority said they were more optimistic about the financial outlook.
Respondents expect their own businesses’ revenues to be 22 per cent lower on average this year than forecasts before Covid-19 took hold.
Almost all finance chiefs expect UK corporates to reduce capital expenditure and hiring in the next 12 months.
Looking ahead to the longterm impact, 97 per cent of respondents believe the crisis will lead to an increase in pandemic planning, while 89 per cent believe it will lead to a diversification and strengthening of supply chains.
Most believe the post-covid world will also see a greater role for the state and higher levels of corporate and household taxation.
Ian Stewart, chief economist at Deloitte, said: “The Covid-19 pandemic has seen business confidence drop from an alltime high to an all-time low in just three months.
“Chief financial officers expect the lockdown to ease in May and June and demand in their own sectors to start recovering later this year.
“But there is no expectation of a quick snap back in activity, with most assuming revenues will not return to pre-crisis levels for at least a year.”