CFOs anticipate return to growth and lasting change in 2021

11th January 2021, 4:41 pm

  • CFOs’ optimism rises to a 12-year high, according to latest Deloitte survey
  • Half of CFOs think it will take until the last quarter of 2021 or later for their own revenues to return to pre-pandemic levels
  • Finance leaders expect levels of home-working to rise five-fold by 2025 compared to pre-pandemic levels, and forecast higher levels of taxation and regulation in the longer term


Finance leaders expect a return to growth in 2021 with optimism rising to a record high*, according to Deloitte’s latest CFO survey.

Despite the surge in business optimism, half of CFOs do not expect demand for their own businesses to recover to pre-pandemic levels until the last quarter of 2021 or later.

The Deloitte CFO survey for Q4 2020, which gauges sentiment amongst the UK’s largest businesses, took place between 2nd December and 14th December 2020, before new COVID restrictions announced on 19th December.

The Brexit trade deal, which also came after the survey closed, is expected to be positive for business confidence. CFOs saw a no-deal outlook as a significant risk to the economy and Brexit as having far less impact on their own business than the economy as a whole.

A total of 90 CFOs participated in the latest survey, including CFOs of 12 FTSE 100 and 44 FTSE 250 companies. The combined market value of the UK-listed companies that participated is £308 billion, approximately 13% of the UK quoted equity market.

There has been a sharp improvement in CFO expectations for UK corporates’ revenues this quarter with 71% expecting a rise over the next 12 months, up from 29% in Q3 2020, while over half (53%) of CFOs expect operating costs to rise. Risk appetite remains weak with only 19% believing it is a good time to take greater risk onto the balance sheet, however this is up from just 3% in Q1 2020.

CFOs believe that the pandemic is set to trigger a fundamental change in the business environment. An overwhelming net balance (98%) of CFOs expect flexible and home working to increase – with a five-fold increase in home working expected by 2025.

Similarly, 98% of CFOs expect levels of corporate and individual taxation to rise, two thirds (62%) anticipate higher regulation of the corporate sector and 59% see the size and role of government in the economy increasing.

Jodi Birkett, partner at Deloitte in the North West, commented: “Boosted by the prospect of Building Back Better, and mass vaccination set to get underway, business sentiment surged last quarter, with CFOs taking the most positive view on profit margins for the last five years. This rebound in sentiment occurred despite a backdrop of continued Brexit negotiations and with two thirds of CFOs believing that a no-deal outcome would have a severe or significant negative effect on the economy.

“The pandemic has triggered fundamental and lasting changes in business, with CFOs expecting rising levels of home-working, greater diversification of supply chains and increasing investment in technology. However, CFOs are optimistic about operating in this changing world, with a return to growth expected this year.”

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