GO
Loading...

CFO Business Confidence Bouncing Back: Survey

Getty Images

Business confidence among chief financial officers rose for the third consecutive quarter, according to a survey by professional services firm Deloitte.

Rising equity markets, ultra-easy monetary policy and improving financial conditions enhanced the outlook of the 120 U.K.-based executives polled, Deloitte said.

The CFOs were also more confident the euro zone would remain intact, despite the controversial bailout of Cypriot banks last month. The executives forecast only an 18 percent chance of a euro zone breakup, down from a high of 36 percent in the second quarter of 2012.

(Read More: Cyprus Finance Minister: We'll Do Everything It Takes)

"Despite the gloomy coverage around the U.K. budget and the crisis in Cyprus, CFOs believe that the level of economic and financial risk facing their businesses has declined. Corporate appetite for risk is not far off the peaks seen in early 2011, when Europe looked set for a sustained recovery," Ian Stewart, Deloitte's chief economist, said in a press release.

Euro zone Purchasing Managers' Index data showed expectations for the year ahead rose to a two-month high in March, with a 21-month high in Germany and 12- and 11-month highs in Italy and Spain, respectively. But output fell for the 19th straight month, at its fastest since last November.

Nonetheless, 34 percent of the CFOs surveyed said the first quarter of 2013 was a good time to increase balance sheet risk.

"Reduced stress in financial markets, especially in the euro area, has delivered improvements in credit conditions for big U.K. [corporations]. It is a measure of the change that CFOs now rate bank borrowing as offering a more attractive form of finance than at any time since the start of the financial crisis," Stewart said.

Two-thirds of CFOs said that bank borrowing was an attractive source of lending, the highest levels recorded since the survey began in third-quarter 2007.

Meanwhile, another survey, out Monday, indicated that nearly one-fifth of British businesses favor complete withdrawal from the European Union. Prime Minister David Cameron promised in January that he will offer Britons a referendum on whether to remain in the EU if he is re-elected at the next election in 2015.

(Read More: Nearly 20% of UK Businesses Favor EU Exit)

—By CNBC's Katy Barnato

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Europe Video