FINANCE CHIEFS are confident of increasing revenues despite chancellor George Osborne revealing lower economic growth forecasts from the government’s budget watchdog during last week’s Autumn Statement.
According to the Office for Budget Responsibility (OBR), the economy will have contracted by 0.1% this year – down from its March forecast of 0.8%, while growth is expected to be 1.2% next year and 2% in 2014.
The chancellor is on course to eliminate the structural deficit within five years. However, the Institute of Fiscal Studies said Osborne’s aim of getting debts falling as a share of GDP has been delayed by one year to 2015.
Finance directors remain upbeat about their prospects despite the gloomy outlook. A poll of 200 senior finance executives by American Express found that 81% of finance directors are anticipating an increase in revenues in 2013 and 77% expect to see flat to moderate growth in 2013.
Investment priorities have shifted from cash preservation strategies towards making investments to drive growth: 61% of finance executives are prioritising investments in revenue generating activities, versus 35% opting for cash preservation to protect the bottom line.
Investments in new products and services and technology top the list for finance executives in 2013, while international expansion is also at the heart of FDs’ spending agenda in 2013, with 72% of survey respondents stating they have plans to expand in international markets, and 56% stating they will spend more on investments in expanding in new markets than they did in 2012.
“CFOs are displaying a nimble approach in balancing their organisations’ costs with the need to invest in areas to generate increased revenues and to deliver on their growth agenda,” said Brendan Walsh, senior vice president, global corporate payments Europe, American Express.
“The increasingly global nature of the economy has significantly increased new business opportunities for UK plc and it is clear that companies are focused on making sure they are well placed to leverage this significant growth opportunity.”