Surveys Suggest Slip in Business Confidence
Business confidence is falling amoung UK firms, according to new reports.
According to the Business Trends Optimism index and the Chartered Institute of Personnel and Development (CIPD), business confidence among UK firms is falling, which is also having a knock-on effect on employment.
Speaking to the BBC, Gerwyn Davies, public policy adviser at the CIPD, said that uncertainty surrounding growth prospects in the UK and abroad is “affecting hiring intentions”, which is especially noticeable in industries such as manufacturing that “stand to lose most in the event of a global slowdown.”
Mr Davies added that the problem is intensified by the inability to get loans or funding from banks: “The biggest factor that will drive jobs growth is access to finance. The demand is there, but the banks simply aren’t lending.”
The BDO’s optimism index, which uses data from main business surveys commissioned by the likes of the CBI and the Bank of England before taking an overall average, is said to be at its lowest level since January.
Commenting on the results, BDO partner Peter Hemington said: “The rapid decline of the manufacturing sector, championed as the key to a rebalancing of the UK economy, is alarming. These days manufacturing in the UK is more about bolting things together that are made in the Far East.”
He added: “The problem with that is that if you have a marked decline in sterling, it does help you with your sales price, but the price of the components you have to buy in from the Far East goes up.”