Finance leaders expecting slow recovery, survey shows

Finance leaders expect a slow pick-up in activity, with no quick bounce back, according to Deloitte’s latest CFO survey.

Almost half of CFOs surveyed do not expect demand for their own businesses to recover to pre-pandemic levels until after Q2 2021. The Deloitte CFO survey for Q2 2020, which gauges sentiment amongst the UK’s largest businesses, took place between June 26 and July 8.

A total of 109 CFOs participated, including CFOs of 23 FTSE 100 and 45 FTSE 250 companies.

The combined market value of the UK-listed companies that participated is £404 billion, approximately 19% of the UK quoted equity market.

In Q2, 78% of CFOs expect UK corporates’ revenues to decrease in the coming 12 months, the second-highest reading on record. This has eased slightly from Q1 where almost all respondents (97%) anticipated revenues to drop over the year ahead.

Perceptions of external uncertainty remain elevated. The majority of CFOs surveyed (80%) now feel there is a high or very high level of uncertainty facing their business, slightly lower than the record-high reading (89%) in the first quarter.

The survey showed the Covid-19 pandemic is continuing to take a heavy toll on economic activity. In Q2, 82% of finance leaders say they are unwilling to take risk on to their balance sheets. This is a slight improvement from the first quarter which saw the second-lowest reading for risk appetite on record.

Covid-19’s toll is apparent