Business confidence improving

Business confidence improving: BDO

  • The Optimism Index increased by 1.7 points this month following its 21-year low reading in January. The Index increased to 90.6 in February from a reading of 88.9 in January – the biggest increase in the index for five months.
  • Despite this increase, businesses still do not anticipate growth in the next two quarters
  • The Inflation Index increased from 100.4 in January to 101.5 in February, its highest level since September 2012.
  • The Output Index saw a decrease from 92.3 last month to 92.1 this month


Business confidence index

Business confidence index / trade confidence index: BCC

Exports rise 1.4% in Q4 2012 – up 5.2% on Q4 2011

  • Nearly half of exporters (45%) said their export sales increased, compared to 13% of respondents, who said that they decreased;
  • In the service sector, export sales increased for 46% of firms, up from 42% in Q3; in manufacturing, export sales increased for 45% of businesses, up from 34% in Q3;
  • 59% of exporters feel that their turnover will increase in 2013. 50% believe that their profitability will improve in 2013;
  • More than a quarter of firms (27%) said they expected to increase staff this year, down from 31% in Q3

Business Confidence hits 21-year low

Business Trends: BDO

  • BDO Optimism Index fell to its lowest reading since the report began 21 years ago
  • It fell to 88.9 in January from a reading of 90.3 in December – the eighth consecutive month that the Index has remained below 95.0, the mark which indicates growth.
  • The Output Index, which predicts short-run turnover expectations, also supports this, falling from 93.1 to 92.3 last month
  • The Employment Index, which measures businesses’ hiring intentions over the next two quarters, rose to 95.1 in January from 93.0 in December
  • The Optimism for manufacturing firms rose to 95.2 in January from 91.9 in December
  • The Output Index score, indicating manufacturers’ order book strength, increased to 92.3 in January from 90.6 in December

Business Confidence Monitor

Business Confidence Monitor, Q1 2013: ICAEW / Grant Thornton

  • The BCM Confidence Index stands at +12.8, up from +4.2 in Q4 2012, suggesting GDP will grow by 0.4% in Q1 2013
  • The availability of management skills is a concern as companies look to increase headcount – leading to a fear that the right people will not be in place when the recovery starts
  • Businesses are still cautious to invest in the recovery, highlighted by continued low capital investment and salary growth

Economy remains stagnant

Economy remains stagnant: BCC Quarterly Economic Survey

  • Q3 results slightly worse than the previous quarter – UK economic performance remains weak and inadequate
  • Business confidence and investment falls
  • Recovery in exports has weakened
  • Domestic orders are weak and far below pre-recession levels
  • Firms less confident in taking on staff
  • Companies reported cashflow problems

Voice of Small Business Index

Voice of Small Business Index: FSB

  • Small firms’ confidence levels tumbled 5.8 points to -4.5 in the third quarter – the fourth lowest score since the start of 2010
  • 21.6 per cent of respondents had applied for finance – down one percentage point on Q2. However, the number of refusals increased from 40.6 in Q2 to 42.4 in Q3. And almost two thirds of members think the availability of credit is poor
  • More than 60 per cent of firms also think that finance is unaffordable
  • Across the UK, 10 in 12 regions saw a decline in confidence – only London and the east Midlands saw an increase
  • Fifteen of the 18 sectors surveyed were more confident than in Q2. Business services sector and small manufacturers continue to perform well, but for those that rely on discretionary spending, confidence fell resulting in the overall negative reading
  • For a 10th consecutive quarter firms reported a fall in revenues

Optimism among UK businesses has fallen to a 20-year low

Business Trends report: BDO LLP

  • BDO’s Optimism Index, which predicts business performance two quarters ahead, suggests the economy will continue to contract at the start of 2013.  The index fell to 89.1 in August from 93.1 in July.  This is the sixth consecutive month that the data has registered a drop, with a four-point plunge from 93.1 in July.  Business confidence is now at its lowest level since the Business Trends indices began in 1992, and significantly below the crucial 95 mark which would indicate a return to growth.
  • BDO’s Output Index – which predicts short-run turnover expectations – has also fallen sharply, from to 90.8 in August from 93.9 in July, reaching its lowest point for 40 months.
  • BDO’s Employment Index fell to 92.1 in August
  • Conditions for UK job seekers are unlikely to improve before the end of the year