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The New Year has started with the less than cheery forecasts from financial directors with half expecting a recession to kick in as the Euro crisis hits the UK economy.
Research from Deloitte indicates that more than half of finance directors now expect a recession, double the number last year, as the strain on spending continues.
Back in the height of the recession in 2009 the predictions from analysts and economists had been that last year would be one of stabilization and this year would see growth. But that was before the Euro crisis spread across Ireland, Portugal, Greece and Italy.
The consequences of the gloomy forecasts are that corporate spending will not be as strong as some might have been hoping for this year with resellers having to compete as hard as ever to get customers to green light projects.
Ian Stewart, Deloitte chief economist, said that with things the way they were across Europe it was not too much of a surprise that CFOs were concerned.
"Against such a backdrop it is no surprise that a return to recession in the UK is, after the euro, the second biggest concern for CFOs in 2012. CFOs are now working on the assumption that Britain will fall back into recession. They see a 54% chance of the UK suffering a 'double dip', up from just 27% a year ago," he said.
"The financial strategies of UK corporates have reversed in the last year. CFOs entered 2011 with a focus on expanding into new markets and increasing capital spending. They enter 2012 with a focus on cutting costs and increasing cash flow. By and large, big corporates in the UK have the firepower to spend. The challenge for policymakers in 2012 is to convince them that it makes business sense to do so," he added.