UK’s business confidence drops to its lowest point since 2009
According to recent data, business confidence in the UK dropped to 18% in October, which was its lowest level in at least 13 years. In contrast, however, net balances of confidence stood at 28% in June and 56% in February, according to Accenture and S&P Global's most recent UK business outlook report.
Optimism in the UK was still higher than that of other European markets. For the quarterly report on business optimism, 12,000 enterprises were surveyed, 1,400 of which were in Britain.
Despite challenging economic conditions, the businesses’ outlook remained net positive, with 41% of them expecting the output to grow and 23% anticipating a decrease.
As per reports, around 12 out of 14 sectors that were surveyed anticipated growth, driven by the high expectations of electrical and transport equipment manufacturers. Only the hospitality sector expressed a negative outlook due to concerns about declining customer spending and rising energy prices.
Compared to other European nations, UK-based firms were more optimistic about an increase in activity (+4%), while companies in Germany and Spain predicted a decline in activity over the next year. The forecast for UK companies was one percentage point higher than the global average of 17%.
Inflationary pressures persisted throughout the period, with 80% of companies expecting to raise their salaries during the next year due to factors, such as the cost-of-living crisis and tough labor market.
The data indicated that selling prices were also going to increase significantly, but not fast enough to make up for a dim profit forecast. Similarly, 13% of companies foresee reduced earnings over the course of the next 12 months.
Organizations planned reductions in both capital and R&D expenditures due to pessimism about profits. Their respective net balances of -7% and -8% represented the lowest levels witnessed since the decline during the COVID-19 outbreak in 2020.
Businesses in the UK are anticipating improvement in activity levels. Only companies in Northern Ireland have predicted a slump in activity (net balance -12%) and a negative projection on employment.
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Nikita Chaurasia
Having always been daft at wordplay, Nikita Chaurasia, post the completion of post-graduation, commenced her journey into the content generation cosmos. Endowed with a professional MBA degree in Advertising and Public Relations, Nikita strives to integrate her creative side with the technical compet...