You are here > Home > News
ICAEW reports fall in business confidence
General News |
01/08/2012
Despite export growth holding up, business confidence appears to be falling in the UK.
The latest UK Business Confidence Monitor published by the Institute of Chartered Accountants in England and Wales (ICAEW) and Grant Thornton has confirmed the fragility of the domestic economy.
Findings from the survey suggest companies have not yet come to terms with the implications of such a sustained period of low economic growth.
The confidence index stands at +1.1, down from +12.0 in Q2 2012, marking the fourth-largest quarterly decline ever recorded.
"Businesses have revised down their expectations of future turnover and profit growth as domestic demand remains weak," ICAEW stated.
The institute said that despite companies having cash, they expect capital investments to increase by just one per cent over the next 12 months.
And this is a "worrying sign" for UK economic prospects.
However, ICAEW said that expected export growth over the next 12 months is still broadly at pre-financial crisis levels.
As such, an export-led recovery remains a possibility for the UK.
Michael Izza, chief executive of ICAEW, said the economy has not yet been able to capitalise on the cautious optimism seen from businesses earlier in the year.
"As we search for signs that growth is accelerating, businesses are holding back on investing, still nervous about the future," he stated.
"What is clear is that we have to break the circle and take advantage of the opportunities that are around today."
Mr Izza claimed that investment in housing and new infrastructure might just bring the growth and confidence that we need.
Posted by Jon Aspinell
------------------------------------------------------------------------
Accountancy Recruitment Agency - Transparent Recruitment Fees Since 1999 - 12.5% Fee / 3 Month, 100% Rebate.
Sign up to our e-newsletter service to receive our headline news directly to your inbox
