Although business confidence across the UK remains negative, the East of England region has bounced back into a positive position according to the latest ICAEW Business Confidence Monitor™ (BCM). Defying the uncertainty surrounding the current political and economic environments, confidence has improved and become marginally positive (+0.7) in Q4 2017.
Market conditions
- Domestic sales growth has followed an upward trend over the last year, contributing to the positive outlook
- Export growth is slower than for domestic sales, at 3.4% year-on-year, compared with 4.0%.
- The proportion of companies operating at capacity is at its highest since Q2 2008
Outlook for 2018
- Over the next 12 months, pressures from input prices are set to lessen
- Selling prices are anticipated to rise at the same pace next year as this year (1.4%), supporting profit growth
- Export growth is predicted to ease to 2.7%
Andrea Dunhill, ICAEW East of England Director said:
“It is promising that business confidence in the East of England has bounced back after a period of negativity in Q3. This higher confidence is due to an upward trend in domestic sales growth over the last year resulting in businesses reporting improving profits. As a result of this, businesses are increasing their investments.
“Businesses need to continue with these investments despite the difficulties they will inevitably face. Britain’s withdrawal from the EU has meant that there is a strain on both management and non-management skills due to a lack of EU temporary workers, particularly affecting the food industry. If we continue to see the same upward trends in profits and sales, businesses will be able to overcome these worries and continue to grow in to 2018.”
