By William Schomberg
LONDON – Big businesses in Britain are rushing ahead with post-lockdown investment plans that could usher in a long-awaited improvement in the country’s weak productivity growth, a survey of chief finance officers showed.
Accountancy firm Deloitte said its poll found CFOs were planning to increase investment, as well as hiring, at the fastest pace in almost seven years and were their most aggressive about acquisitions in 11 years.
Many firms around the world have ramped up their spending on digital technology in response to the coronavirus pandemic which up-ended their working practices.
Ian Stewart, chief economist at Deloitte, said CFOs were much less concerned about Brexit. COVID-19 was still the top of the worry list, followed by inflation and climate change. Over three quarters of CFOs reported growing recruitment problems.
“The pandemic, like all major shocks, will reshape the economy and we are likely to see years of normal growth compressed into just a few months,” he said.
Eight in 10 CFOs who took part in the survey said they thought productivity would grow faster after the pandemic.
“That offers the hope of a more comprehensive recovery than after the global financial crisis,” Stewart said.
Bank of England Governor Andrew Bailey said on Friday he expected that an increase in productivity gains brought about by more investment in technology since the onset of the coronavirus crisis would prove to be lasting.
Slow productivity growth weighs on an economy’s long-term growth potential and ultimately the earnings of workers, and has plagued Britain’s economy since the late 2000s.
Deloitte said 71% of CFOs it polled expected to increase capital expenditure – helped by British finance minister Rishi Sunak’s two-year tax break for corporate investment – and 76% expected more hiring over the year ahead. By contrast, 2020’s top priority had been cost reduction.
The Deloitte survey was conducted between June 16 and 29 and polled 107 CFOs from companies, 69 of them UK-listed with a combined market value of 548 billion pounds ($758 billion).
($1 = 0.7227 pounds)