UK finance chiefs push back forecasts for recovery in demand to Q3 2021, Deloitte says
By Alexander Bueso
Date: Monday 19 Oct 2020
(Sharecast News) - A majority of finance chiefs in the UK are pushing back their expectations for a return to the levels of demand seen before the Covid-19 pandemic, the results of a closely-followed survey.
Ian Stewart, chief economist at Deloitte, commented: "Business leaders expect a longer haul back to pre-COVID levels of activity. With further restrictions coming into effect, businesses have scaled back expectations and are focussed on strengthening their businesses and their balance sheets. British businesses are gearing up for a long winter with COVID-19, with a full recovery on the horizon only after next summer."
The survey from consultancy Deloitte showed that 62% of finance directors do not expect a full recovery in demand until after the first half of 2021.
That was up from 49% at the end of the second quarter.
Furthermore, while the pandemic is their chief concern, Brexit is not next in line on their list of worries - but rather rising "geopolitical issues".
Nonetheless, even a "limited" Brexit deal with the European Union "would significantly reduce the shock to business activities from a no deal Brexit", they said.
Against that backdrop, their number one priority for over the next 12 months was now so-called 'business transformation', with an emphasis on digitisation, automation and streamlining.
Overall, a broad majority of 78% of chief financial officers still expected capital expenditures would fall over the next 12 months, against the 86% who held that view three months before.
On Brexit, 30% of CFOs said hiring would be curtailed in case of a no deal Brexit, versus 15% in a thin-deal scenario.
For capital spending, the respective percentages were 26% and 11%.
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