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26 January, 2022 - 20:06 By Tony Quested

Record number of CFOs prioritising investment

Finance leaders are focused on growth, with a record 37 per cent rating an increase in capital investment as a strong priority for their business in the next 12 months, according to Deloitte’s UK CFO Survey Q4 2021. 

Expansionary strategies, including introducing new products and services, expanding into new markets and raising investment are a greater focus now than at any time since the question was first asked in 2009.

CFOs cite growth in demand at home and abroad, and the climate transition as the main drivers of investment. On the type of investment, an overwhelming majority of CFOs expect to invest more in digital technology (94 per cent) and workforce skills (77 per cent) over the next three years than in the years before the pandemic. 

Also, most CFOs (84 per cent) expect productivity to grow faster in the next three years than in the years before the pandemic.

Paul Schofield, South East Practice senior partner said: “Locally I am seeing many of our significant clients stepping up investment as they look to sustain acceleration away from the turbulence of the last couple of years. 

“This includes some interesting M & A and restructuring activity in both public and privately owned companies, across most sectors; driven by the confidence that increasing demand, and investor willingness to support, has brought. I do see 2022 as being a strong growth year for companies in the East and South East.”
 
Recovery and risk outlook

CFOs rate persistent labour shortages, the pandemic, climate change and higher inflation respectively as the top risks facing their businesses. Compared to this time last year, CFOs have reduced their risk rating for the COVID-19 pandemic. 

By contrast, labour and supply shortages have emerged as significant short-term risks over the last year, resulting in a higher risk rating for inflation.
  
Labour market and supply chains

Almost half of the CFOs surveyed reported that their businesses have faced significant or severe recruitment difficulties over the last three months. 

There has been an uptick in the proportion of CFOs reporting that their businesses have experienced significant or severe supply chain disruption over the past three months, compared to the previous edition of the survey. They expect some easing of constraints, with one in five CFOs anticipating similar levels of disruption in one year’s time.

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