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June 4, 2013

Deloitte UK foresees renewed optimism among UK businesses

Optimism returns to UK corporate sector as 60% of Britain’s biggest businesses are planning on investing at least £50m this year, with a further 30% planning to invest this amount over the next two years, a Deloitte survey shows.

This is in contrast to the previous five years, where half of those asked said they had been through at least one round of cost cutting.

Cost cutting was not the only way businesses survived, however, with 29% attempting to create a larger more diverse customer base and 27% diversifying the products and services being offered.

Businesses were optimistic about the future, with just 4% of business asked saying they would focus on surviving over the next three years, compared to 28% saying they were looking for stability and 68% expecting a period of growth.

"The low growth environment of the past five years, coupled with levels of consumer and government debt, mean that big business has to take a lead in driving a new era of wealth creation in the UK," Deloitte UK chief executive David Sproul said.

Sproul added that 80% of respondents in the survey believed business is best placed to lead the way to growth.

This growth was predicted to come from overseas markets, according to 66% of those asked, with 37% forecasting international trade growth of more than 75% in the period.

Despite this, Deloitte UK head of research Chris Gentle warned that the UK was currently underperforming in the fastest growing environments.

In order to break new markets, 60% of respondents said they would consider forming alliances with local businesses, 55% said they were examining options for M&A activity while 44% said they were seeking to grow organically.

"British business emerges from this hugely challenging period in reasonable health and with balance sheets bolstered to the extent where UK plc now holds in excess of £700bn in cash," Sproul concluded.

The survey involved interviewing senior executives from 126 companies with an annual turnover of over £1bn.

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Deloitte UK

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