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UK Business Confidence Declines Uncertainty In The UK

by Jim ONeil on August 17, 2011

in business loans

It may go without saying that consumer confidence in the UK is not good. The feeling seems to have spread to the corporate sector, with two recent surveys revealing that UK business confidence is also declining. Manufacturing sector weaknesses are mainly to blame, suggested each report. Unstable global market economics are placing negative pressure on businesses and prospects, potentially reducing employment levels.

Consulting firm KPMG and the Chartered Institute of Personnel and Development (CIPD) recently published an updated Labor Market Outlook. This revealed that additional employers plan to reduce number of jobs instead of expanding workforces within third quarter 2011. In July, the BDO accounting firm Business Trends optimism index declined to 95.1 from 95.6 of just one month earlier.

Gerwyn Davies, public policy adviser with CIPD, stated that an “increasing uncertainty” exists regarding UK and global economic growth. This is beginning to affect hiring, especially within industries that would be hardest hit by global slowing, such as manufacturing. Peter Hemington, BDO partner, reported that the marketing sector is key to rebalancing the UK economy. Its rapid decline, he said, is “alarming.”

Mr. Hemington hinted that businesses may not be benefitting from a weak pound. He explained that when sterling declines drastically, it helps sales prices. However, the cost for components from the Far East increases, counteracting this benefit. Businesses are finding it harder to qualify for loans to support their expenditures due to restricted lending by banks.

The remainder of 2011 could be a wild ride for businesses in the UK. Manufacturers hope things improve because they are not eager about downsizing their workforces. Now more than ever, consumers need jobs in order to support themselves during this time of increasing prices for basic goods and services. Taking on loans debt to cover their everyday expenses is not a habit they want to form.

ToniHarrison

Morning. Looking for a good UK business news site. Any suggestions?

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