According to recent data, the UK’s business confidence dropped to 18% in October, marking the lowest level in at least 13 years.
The most recent UK business outlook report from Accenture and S&P Global compares this to net balances of confidence of 28% in June and 56% in February.
According to the report, UK market optimism was remained higher than other European markets.
There were 12,000 enterprises questioned for the quarterly report on business optimism, including 1,400 in Britain.
Despite challenging economic conditions, businesses’ perspective for the future remained largely positive, with 41% expecting output to increase and 23% expecting a decrease.
As many as 12 of the 14 sectors covered by the survey predicted growth, led by strong expectations among manufacturers of transport and electrical goods.
Hospitality was the only industry to signal a pessimistic outlook, with fears of reduced customer spending and high energy costs.
UK companies were much more confident of an increase in activity than elsewhere in Europe (+4%), while companies in Germany and Spain provided negative projections for the next 12 months.
The outlook for UK companies was also one percentage point above the global average of 17%. Inflationary pressures remained high over the period, with 80% of companies planning to raise their wages in the next 12 months in light of the cost of living crisis and difficult labor market conditions.
Selling prices are also likely to rise sharply, however, the data showed, not fast enough to offset a negative earnings outlook. Similarly, -13% of companies expect lower profits over the next 12 months.
Pessimism about profits has led companies to plan cuts in both capital spending and R&D spending. They were the lowest seen since the decline during COVID-19 in 2020, with net balances of -7% and -8% respectively.
Employment is still expected to rise, although hiring intentions have fallen to a two-year low. Sentiment among companies on hiring the skills they need over the next 12 months remains broadly unchanged from 2021, although the percentage of businesses lacking trust has dropped slightly from 40% to 35%.
Only half of the companies surveyed were confident in hiring entry-level staff, while only 29% expect to find experienced candidates. Companies are very likely to prioritize hiring employees with operations (28%), sales and marketing (18%), and digital skills (15%).
Look: what is a recession and how do we detect it? Simon Eaves, Accenture’s market unit leader in the UK and Ireland, said: “As we approach what is likely to be a difficult winter for the UK economy, business confidence has understandably taken a hit.
“However, many UK companies continue to show resilience in the face of economic difficulties. Recruitment plans remain positive and overall optimism, although contained, is higher than that of many of our European counterparts.
“During these challenging times, businesses need to stay focused on the long term and plan for the next growth cycle to stay competitive. They can do this by looking to reinvent their operations across the company, invest in new technologies and skills, and embed sustainability in everything they do.”
Earnings forecasts were negative in most regions, but with investment expected in the North West and West Midlands.
Only Northwest firms expect higher levels of both CAPEX and R&D spending in 12 months (+7%). Businesses in the West Midlands also expect a strong balance between business and employment, at + 17% and + 15% respectively.
More generally, businesses across the UK expect business levels to improve 카지노사이트 추천. Only Northern Ireland businesses expect a decline in activity (net balance -12%), with a negative employment forecast.
Look: How does inflation affect interest rates?