UK is a good place to do business, say CFOs

CFOs see the UK as a good place to do business, according to Deloitte’s latest CFO survey.

Prospects for UK earnings growth and business investment in 2015 are positive, according to Deloitte’s latestsurvey of 119 chief financial officers (CFOs) of UK companies. The vast majority of those surveyed view the UK as a good place to do business.

Most of the CFOs surveyed expect wages to increase by around 2.9 per cent in 2015, which is much faster than current levels of inflation, meaning workers can expect their pay packets to be worth more.

Wage growth forecast higher than inflation

Inflation was a concern for most consumers following the financial crisis, as prices in the UK rose faster than wage growth, meaning consumers had less purchasing power. However, the report suggests this trend will be spun around to end the squeeze on consumers.

“CFOs expect 2015 to be a year of investment and of recovering real earnings in the UK. Corporate and consumer spending look set to lend the UK economy important support, suggesting the UK will post decent growth through 2015,” said Paul Feechan, chief economist at Deloitte.

“On average, CFOs expect wages in their businesses to rise by 2.9 per cent in 2015. With economists expecting inflation of just 1.3 per cent in 2015, real earnings look set to register the first annual increase in eight years in 2015,” he added.

Indeed, it appears that firms will receive even better access to funding as business investment is projected to rise by nine per cent in 2015, higher than other major industrialised nations and on the back of strong growth in 2014, where capital expenditure rose by eight per cent.

Business investment could hit 15-year high

If the nine per cent target is reached, it will take the share of UK GDP accounted for by business investment to the highest it has been since 2000.

However, CFOs are wary of a few uncertainties revolving mainly around the forthcoming General Election and Eurozone woes, involving potential deflation and weakness. Despite this, most CFOs are optimistic about the general environment for firms in the UK.

“CFOs are positive on the UK business environment. Most do not think the UK has a particular productivity problem and CFOs overwhelmingly see the UK as a good place to do business,” said Mr Feechan.