Confidence among businesses has fallen according to the latest ICAEW/Grant Thornton UK Business Confidence Monitor (BCM), indicating that the economic recovery will slow in the second half of 2010.
Despite uncertainty as to the impact on the recovery of the Coalition Government’s plans to reduce public spending, the BCM’s financial performance indicators suggest that the financial health of UK businesses continues to improve.
Key findings for Q3 2010 include:
• The Business Confidence Index (BCM) has declined since Q2 2010. It fell from +25.5 to +21.5, a fall of four points
• Nearly a fifth (19%) are now less confident about the coming year – up from 14% in Q1 2010
Despite this, turnover and profit growth returned to positive territory for the first time since the start of 2009. Growth of 1.6% and 1.7% respectively are reported for the year to date.
Businesses expect to increase prices by only 0.9% in the next 12 months which points to limited inflationary pressures and no need for interest rate rises for some time.
Michael Izza, CEO of ICAEW, said: “UK businesses that came through the recession are now facing the challenge of surviving the recovery. They still don’t know what the future holds and are uncertain about how the mood of fiscal austerity will impact the economic recovery. Government needs to deliver on its commitment to ensure Britain is open for business while taking the tough decisions required to tackle the deficit.”
Scott Barnes, CEO of Grant Thornton, said: "There is a mixed picture for business across the UK's regions and some sectors continue to struggle more than others. Clearly economic conditions remain tough but there are signs that some companies are looking to switch from short-term survival measures to opportunities for growth. The recession has changed the business landscape and the measures businesses have taken to survive may make them stronger as the recovery begins to take hold."
The Institute of Chartered Accountants in England and Wales (ICAEW), in collaboration with Grant Thornton, is hosting a unique seminar which will provide businesses in the South with an insight into the latest economic trends as well practical advice on how these may impact them.
The free event, ‘New Government, New Economy – How Confident Should Business Be?’ is dedicated to helping business in the South to better understand the current market dynamics and how they can best navigate their way through them. Taking place at The Rose Bowl in Southampton on Tuesday September 7 12pm-2pm, the event includes discussion, networking and a buffet lunch.
Keynote speaker and macroeconomic forecaster - John Whitley – will present the latest regional results of the ICAEW/Grant Thornton UK Business Confidence Monitor, a barometer of business confidence.
Whitley – who was the ‘eyes and ears’ of the Bank of England in the region for many years - will also share the latest insights into the changing economic trends and his view on the impact of the Government’s new plans for businesses. He will also be discussing the implications of the current problems in the Euro area and how that may affect business in the South.
During the seminar, Grant Thornton partner Norman Armstrong will highlight the urgent issues that regional and local authorities need to act upon now and will share the views of leading industry figures from the region. Armstrong will also be advising how businesses can respond to the challenges facing them in the current climate.
He said: “As the new Government sets out its plans to steer the country out of recession, business leaders across the South are asking how these changes will affect them and their operations. This event provides an opportunity to discuss these issues and share insights on the challenges affecting business right now. Our collaboration with ICAEW means the outputs from this event will be shared with Government on a national level – so it really is a chance to get your voice heard.”
Fay Webster, ICAEW regional director for the SE, added: “Confidence among companies in the South East has consistently been one of the strongest in the UK. It will be interesting however to see what the current opinion is among local business leaders as to how the public sector cuts will affect the local economy and how confident they are for the future.
The event marks the start of a national partnership for ICAEW and Grant Thornton and will be rolled-out nationally over coming months.
The event will be chaired by BBC Solent’s Chris Carnegy. Tickets are strictly limited. For further information and bookings visit www.icaew.com/southeast.