British businesses have entered 2013 in a more optimistic mood than at the start of last year, a new study has revealed.
Research conducted by Big Four professional services firm Deloitte found that chief financial officers (CFOs) are less concerned about immediate threats to their organisation.
The probability of a euro break-up within the next 12 months is rated at 22 per cent compared to 37 per cent a year ago, while 81 per cent of respondents said they supported UK monetary policy.
This suggests they are relatively content with interest rates, inflation and the availability of credit at present.
CFOs were also far less worried about company-specific worries such as margins, cash flow and credit availability, Deloitte found.
Just four per cent of respondents cited the cost of and difficulty in raising finance as being major worries for their businesses.
Ian Stewart, chief UK economist at Deloitte, said that despite expectations of a weak recovery in 2013, large companies enter the new year with a greater focus on cost control and cash flow than at any time in the last two years.
"The emerging picture is of businesses which are constrained by low growth and uncertainty rather than weakness in business models or access to capital," he stated.
"Despite confidence fluctuating with the ups and downs in economic prospects, we've seen a long term drift to greater defensiveness by corporates not for want of capital but rather for scarcity of opportunity."
Mr Stewart said the "dominant concern" of UK businesses for 2013 is the economy, just as it has been at the start of each of the last four years.
"Confidence has returned, but perceptions of economic and financial uncertainty remain high and the greatest worries for CFOs are still the weakness of the euro area and UK economies," he added.
But the expert said UK corporates "have not closed the door to growth".
Around half of the CFOs questioned believe troubled times create opportunities to take market share and expand capacity or to implement overdue change within the business, he noted.
"Big businesses are also more positive about undertaking capital expenditure than they were a year ago," Mr Stewart stated.
"The difference now is that such opportunities are more selective. CFOs cannot rely on the upward escalator of steady growth to lift revenues. They have to work harder for, and carefully judge, the risks of expansion."
He said that while CFO sentiment yo-yoed in 2012 - largely in response to the ups and down of the eurozone - corporate strategies have become "steadily more defensive" over the last year.
"By and large big corporates do have the firepower to hire and invest," he added.
"However, five years on from the onset of the financial crisis the missing ingredient, and the one which holds the key to corporate behaviour, is confidence about future growth."
Posted by Dan Smith