Increasing economic uncertainty hits business confidence, says Deloitte

Difficulties facing emerging economies and global markets are eroding corporate appetites for risk, according to a survey of Chief Financial Officers (CFOs) by Big 4 firm Deloitte.

Of the CFOs that took part, only 47% thought that now would be a good time to take any risks, a drop from 59% in Q2 2015.

Q3 2015 survey

The Deloitte CFO Survey for Q3 2015 asked CFOs drawn from 122 FTSE 350 and other large private companies in the UK their views on a range of issues.

The study found that overall levels of optimism had fallen, with 29% of CFOs feeling less optimistic than three months ago, whereas in Q2, only 20% were worried about their company's future prospects.

Chief economist at Deloitte Ian Stewart said that both emerging market weakness and equity market turmoil have negatively affected the risk appetite of some of the UK’s largest businesses.

David Sproul, senior partner and chief executive of Deloitte, commented: “Softening demand in emerging economies, greater financial market volatility and higher levels of risk aversion make for a more challenging backdrop for the UK’s largest businesses."

Good shape

However, it's not all doom and gloom.

Sproul added: “The UK economy is in pretty good shape. Low inflation and rising pay have rebooted consumer incomes. Boosted by cheap credit, consumer spending, which accounts for more than 60% of the economy, has risen 3.1% in the last year, the fastest rate in eight years. Nor should we overdo the gloom on the external environment.

"The outlook for emerging market economies has softened, but the US is seeing a decent recovery, the euro area is growing again and the pace of activity seems likely to quicken into 2016."