A new survey has revealed that support among chief financial officers (CFOs) for UK membership of the European Union (EU) has narrowed in the last quarter.
Deloitte’s survey of 137 CFOs found that the surge in business confidence that began in late 2012 reversed in 2015.
In the survey, 62% agreed that the UK’s continued membership in the EU was beneficial, down from 74% when the same question was asked in Q2.
About 6% of respondents said UK business would benefit from leaving the EU, compared to only 2% in Q2.
The outcome of the Prime Minister’s renegotiation of UK membership plays a key role for 28% of respondents, up from 23% in Q2. The remaining 4% said they were uncertain of their position.
Deloitte senior partner and chief executive David Sproul said: "A clear majority of CFOs continue to favour the UK remaining in the EU, but the proportion of those expressing unqualified support has fallen. This mirrors what we have seen from the broader public in opinion polls in the last six months.
"With around one third of CFOs undecided on their position or awaiting the outcome of renegotiation discussions, the eventual deal may well significantly affect business attitudes to EU membership."
About 30% of CFOs said they were less optimistic about the prospects for their companies compared with three months ago, up from 20% in Q2.
Only 12% said they were more optimistic, down from 36% six months earlier.
The survey has revealed that in line with the shift, CFOs’ appetite to take risk onto their balance sheets continues to decrease.
About 37% of respondents said now is a good time to take on risk, down from 47% in Q3’s survey and around half the level of the 72% seen in Q3 2014.
Even though most of CFOs still expect revenues to rise in the next twelve months, Deloitte said the outlook is at its weakest for two and half years. 52% of CFOs anticipate revenue growth, down from 81% in Q2 and 64% in Q3.
44% of CFOs said cost reduction is a strong priority, up from 34% in Q3. Around 37% said increasing cash flow is a strong priority, up from 34% in Q3, and selling of assets increased to 13% from 9%.
The proportion of CFOs saying expanding by acquisition is a strong priority declined to 19% in Q4 from 22% in Q3, while those saying raising capital expenditure is a strong priority fell to 17% from 19%.
According to the survey, 68% of CFOs are optimistic about growth in the UK in 2016, with 82% positive on US growth.
However, only 25% of CFOs are optimistic about growth in the euro area, where as 27% are optimistic on growth for emerging markets.
Deloitte chief economist Ian Stewart said: "Doubts about the pace and sustainability of the global recovery are weighing on business sentiment. Confidence fell throughout 2015 and ended the year at its lowest level since Q2 2012, when the euro area was in recession."