Covid-19 sees business confidence hit historic low - survey

Business confidence in the UK has plummeted on the back of the coronavirus, with revenues expected to tumble and demand slow to recover, a survey of finance chiefs showed.

Deloitte's quarterly Chief Financial Officer Survey found that confidence among finance directors was at its lowest since the survey launched in 2007 over the first three months of 2020. Nine out of ten finance directors said they believed there was currently a high or very high level of uncertainty, well below the previous record low seen during the 2008 financial crisis.

Of those surveyed, 22% also expected revenues to be lower, on average, than their pre-coronavirus plans this year.

A majority – 76% – believed demand for their company’s products and services would start improving later in the year, with 40% predicting demand would start to recover in the third quarter.

But 53% believed peak levels of activity would only be regained “sometime after mid-2021”.

The survey, which took place between 8 and 22 April 2020, also found that 59% of companies had furloughed or intended to furlough staff; 33% were diversifying suppliers; and 30% were accessing, or had plans to access, the Bank of England’s emergency Covid-19 Corporate Financing Facility, which is aimed specifically at helping large companies weather the crisis.

Looking further ahead, however, the survey noted: “CFOs see Covid-19 causing lasting change in the business sector, and a strong focus on business resilience. Most CFOs expect to see significant increases in pandemic planning and most believe supply chains will become more diverse and flexible.

“Flexible working is seen as the big winner, with 98% of CFOs expecting it to increase as a result of the crisis.”

Deloitte said 104 finance chiefs took part in the survey, with respondents working at FTSE 100, FTSE 250 and large private companies, as well as the UK subsidiaries of major overseas firms.