Our latest Business Confidence Monitor (BCM) published today (Wednesday) shows a massive decline in business confidence and reflects just how rocky things could become.
It also suggests that the economy will contract in the last quarter of the year by as much as 0.2%. This would mean the UK economy growing by 0.9% in 2011, significantly below the Office of Budget Responsibility’s forecasts in March.
The BCM findings are somewhat at odds with what I hear as I travel around the country talking to members running and advising businesses. They tell me that their businesses have held up well over the last year despite the sluggish economic recovery.
Despite this, what is clear is that the outlook for businesses is becoming increasingly uncertain. This is making them more cautious in their planning and holding back on decisions on hiring and investing. Whilst the situation is worrying, despair is not the answer. Instead we need to look at how to address this fall in confidence so that businesses feel more certain about the future.
Here’s what we are doing at ICAEW to help:
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We will be writing to the Chancellor ahead of his Autumn statement to suggest ways to help business in the short term. Government’s response is critical to changing the current mood music and giving a signal that, as a country, we can turn the situation around.
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We are working with the Government on encouraging UK businesses to grow their exports, specifically to non-traditional growth markets such as Brazil, India, China and beyond. On Thursday, I am taking part in an Export Conference alongside the Prime Minister at which I will launch a new guide to exporting that we have developed in conjunction with UKTI.
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We are also encouraging our members to take part in our Business Advice Service, which offers impartial business advice to start up and growth businesses (
www.businessadviceservice.com). This is a great example of how our profession has come together to help businesses who need professional support and advice in these difficult times.
I am particularly keen to hear any ideas that you think could also help the current situation. Are there other policies that can be introduced quickly which will help businesses survive and grow but which won’t have a significant cost on the public purse?