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Uncertainty over economies in Europe increases: survey

Xinhua, May 12, 2016 Adjust font size:

A large majority of financial leaders in European businesses say that there is a high level of financial and economic uncertainty, according to a survey published on Wednesday.

A total of 68 percent of chief financial officers (CFOs) reported that economic and financial uncertainty was at a high level, the Q1 2016 European CFO Survey published by financial services firm Deloitte revealed. This is an increase from the 66 percent figure in the Q3 2015 print of this survey.

Perceptions of uncertainty are highest in Germany, with 93 percent of CFOs reporting high levels of uncertainty, followed by the UK (83 percent) and Russia (72 percent). The lowest levels of uncertainty are in Norway, where 24 percent report high uncertainty, Sweden (37 percent) and Belgium (49 percent).

With closely contested elections recently, large rises in business uncertainty were seen in Spain (52 percent to 66 percent) and Ireland (up 13 percent to 52 percent). Uncertainty in the UK has also risen, by 10 percentage points, as it heads towards its referendum on EU membership on June 23.

CFOs in Germany, Portugal, Turkey and the UK cited national and international political factors as their top concerns.

Employment increases were forecast by 39 percent of eurozone CFOs, up from 35 percent in Q3, with Ireland leading the way on job creation, with 68 percent of CFOs forecasting an increase in job numbers (up from 55 percent in Q3), followed by Italy (54 percent, up from 43 percent) and Spain (unchanged at 46 percent).

The UK saw the largest decline around hiring expectations, where 18 percent of CFOs plan to increase hiring, down from 47 percent in Q3.

Ian Stewart, chief economist at Deloitte UK, said: "Internal politics has been a destabilizing influence in Spain, Ireland and Portugal... and the UK has seen rising uncertainty ahead of its referendum on EU membership.

"The resilience of hiring plans in the face of these uncertainties show CFOs expect Europe's recovery to roll on. In a sign that the recovery is spreading from Europe's centre, hiring plans are strongest in those countries that saw the largest rises in unemployment after the financial crisis."

In total, 1,490 CFOs took part in these surveys, conducted between January and March 2016. Endit