133 CFOs, including 35 at FTSE100 companies, took part in the survey between 11th and 26th September. Respondent companies account for 34% of the quoted UK equity market. The full survey report is available at:

http://www.deloitte.com/view/en_GB/uk/research-and-intelligence/deloitte-research-uk/the-deloitte-cfo-survey/2967571bb303a310VgnVCM1000003156f70aRCRD.htm

CFO optimism has made up some of the record losses sustained in the second quarter as the euro crisis intensified. Spirits seem to have been lifted by the recent promise of more aggressive action from the Federal Reserve to support growth and from the European Central Bank (ECB) to strengthen the single currency.

Yet while central bank activism helped fuel a strong, 16% rally in global equity markets between June and mid September CFOs take a more cautious longer term view.

CFOs believe an unpredictable economic and financial environment is the single biggest factor constraining investment. 90% of CFOs rate the economic uncertainties facing their business as being above normal and 43% expect the UK's recession to run on or recur within the next two years.

So, despite a pickup in business confidence, CFOs have continued to shift to more defensive balance sheet strategies, a process that has been underway since the start of the year. Increasing cash flow, cutting costs and reducing leverage are stronger priorities than at any time in the last two years; conversely capital spending is a lower priority than at any time in the last two years.

Recent announcements from the ECB have eased, but not dispelled, CFOs' worries about the single currency. On average CFOs see a 27% probability of one or more countries leaving the single currency in the next 12 months. CFOs rate the weakness of the economies of the euro area as second only to macroeconomic uncertainty in its dampening effect on business investment.

While the macroeconomic risks abound, the internal story for large companies looks pretty healthy, partly because of a favourable financing environment. Credit is rated as being cheaper than at any time in the last five years and financing costs are expected to stay low. For the large companies surveyed the cost and the availability of external finance rate as weak constraints on investment. CFOs report that long term growth in demand for their products and services is providing support for capital spending. It is striking too, that, despite worries about growth, only one in five CFOs expect revenues to decline over the next year.

The CFO Survey reveals that big corporates are increasingly focussing on managing and mitigating economic risks. The challenge is to do so and, at the same time, to capitalise on strong corporate balance sheets to build new sources of growth.