Partner Article

Business confidence “zigzags” to a seven month low

Confidence in UK businesses has fallen to its lowest point this year after a “zigzag” pattern reported in the latest Business Trends report.

Statistics released by Bristol-based business advisors, BDO, have shown that optimism has fallen 93.5% in June.

BDO’s Optimism Index is an indication of future business performance for the second half of the year, and has seen the fifth consecutive month’s decrease to hit a seven-month low.

These figures have been collated from the results of all the major business trend reports to give a comprehensive view of current attitudes in business.

Peaks and troughs in business confidence mirror the fluctuating UK economy, and businesses show that their optimism relies heavily on economic forecasts.

Various sectors report differences however, with manufacturers claiming an improved level of confidence up by 7.3% between June and July after it fell 8.4% the previous month.

The precarity of these figures is clear, and similar statistics have come out of the service industries. Service sector reports say that optimism in July fell 2.1% after consistent increases between February and May.

A partner of BDO, Peter Hemington, commented: “This month’s figures serve as a stark reminder of the continuing difficulties the UK economy faces, with zigzagging business confidence undermining the improvement in confidence that we saw at the start of 2012.

“Where there is cause for cautious optimism is in the revived confidence in the manufacturing sector. The sector should be applauded for taking a pragmatic and adaptable approach to diversify exports away from the volatile eurozone.

“ONS figures in July showed that for the first time more than 50% of the UK’s goods went to countries outside the eurozone.

“Other UK businesses could look to emulate this tactic - opportunity costs, and it may be that their money is better spent marketing elsewhere, looking to the BRICs, CIVETs and the so-called Next 11.

“In that vein, the Government’s initiative to use the Olympic Games as an opportunity to discuss trade and investment with a variety of Heads of State in a series of summits is laudable.”

This was posted in Bdaily's Members' News section by Miranda Dobson .