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Steady as she goes

The latest UK Business Confidence Monitor report from the ICAEW has just been published and brings with it further encouragement that the UK economy is slowly but surely feeling better about itself after the toughest economic recession since the 1930′s.

The encouraging takeaways from this latest BCM report are that business confidence grew for the fourth consecutive quarter, it’s the sharpest and most prolonged bounce back since the BCM index began and the latest figure marks the highest levels of confidence seen since 2004.

What’s still worth bearing in mind, though, is the spectre of deep public spending cuts this summer once a new government is installed and sets about working down our monumental public spending deficit. And the fact that while we are clearly feeling much more confident than we did 18 months ago, many businesses are still running below capacity, funding is still hard to find and overall GDP is unlikely to get an altitude induced nosebleed anytime soon.

However, it’s all heading in the right direction – keep on trucking.

 

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3 comments

Stuart Jones
4 March 2010 #

It’s still patchy though.

Look at page 13

SMALLEST AND MEDIUM-SIZED FIRMS LESS CONFIDENT THAN
UK AVERAGE

Gary Turner
4 March 2010 #

Yep, I spotted that. Strangely the middle category between these two (Small 10-49) are way more confident than the average.

I guess mid-sized companies still carry sizeable costs bases and need real sales growth to come through, and smaller companies are perhaps more susceptible to the vicious cashflow circle? Only guesswork.

I’m attending a panel meeting with cebr, the people who run the BCM survey on behalf of the ICAEW in a couple of weeks, I’ll dig into why they think this is and report back.

Barry James
5 March 2010 #

Interesting. I’ve not dug into the report yet but what I’ve been seeing is that the smaller companies with much lower cost bases are picking up business where they couldn’t previously from their bigger rivals as everyone struggles to cut costs.

This is particularly so with the VA (Virtual Assistant) sector which has grown enormously as a result of the recession because they are able to to replace a wide range of skills which otherwise would have to be provided in-house at a much higher costs and with less flexibility.

I think the changes will me largely permenant – business Darwinianism at work?

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