PwC findings backed up by Grant Thornton: Business confidence has deteriorated

The ICAEW and Grant Thornton have published the latest Business Confidence Monitor for the third quarter of the year, confirming the fragility of the UK economy.

The ‘Confidence Index’ confirms UK companies have not yet come to terms with the implications of such a sustained period of low economic growth.

This confirms PwC’s findings released also earlier today that consumer confidence was still at a low point with retail insolvencies jumping up more than 10% in the last quarter.

“Bad weather” was also put down as a contributing factor to the rise in bankruptcies, with Clinton Cards and Game among victims of the high street cull.

The key findings in the Grant Thornton/ICAEW research are:

  • Despite companies having cash, firms expect capital investments to increase by just 1% over the next 12 months
  • Expected export growth over the next year is still at pre-financial crisis levels - meaning an export-led recovery remains a possibility
  • Businesses have revised down their expectations of future turnover and profit growth as domestic demand remains weak

The confidence index stands at +1.1, down from +12.0 in Q2 2012 - the fourth largest quarterly decline since BCM started.

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