UK companies rush to invest if economy reopens – Deloitte

LONDON, July 12 (Reuters) – Major corporations in the UK are rushing ahead with post-lockdown investment plans that could usher in a long-awaited improvement in the country’s sluggish productivity growth, a survey of finance chiefs found.

Accounting firm Deloitte said its survey found that CFOs planned to grow investment and hiring the fastest in nearly seven years, and have been the most aggressive on acquisitions in eleven years.

Many companies around the world have increased their spending on digital technology in response to the coronavirus pandemic that has turned their work practices upside down.

Ian Stewart, chief economist at Deloitte, said CFOs were much less concerned about Brexit. COVID-19 remained high on the list of concerns, followed by inflation and climate change. More than three quarters of CFOs reported increasing recruitment problems.

“The pandemic, like all big shocks, will reshape the economy and we will likely see years of normal growth compressed into just a few months,” he said.

Eight out of ten CFOs who responded to the survey said productivity would grow faster after the pandemic.

“That offers hope for a broader recovery than after the global financial crisis,” said Stewart.

Bank of England Governor Andrew Bailey said Friday he expected any surge in productivity gains brought about by more investment in technology since the coronavirus crisis erupted would prove sustainable. Continue reading

Slow productivity growth weighs on an economy’s long-term growth potential and, ultimately, workers’ incomes, and has plagued the UK economy since the late 2000s.

Deloitte said 71% of CFOs surveyed expected an increase in capital spending – aided by UK Treasury Secretary Rishi Sunak’s two-year corporate investment tax break – and 76% expected more hires in the coming year. In contrast, reducing costs was a top priority in 2020.

The Deloitte survey, conducted between June 16-29, interviewed 107 CFOs of companies, including 69 UK-listed companies with a combined market value of £ 548 billion ($ 758 billion).

($ 1 = 0.7227 pounds)

Writing by William Schomberg, adapted by David Milliken

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