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Collapse in UK Business Confidence?

With the UK economy still not in the best health, there’s always going to be a knock on effect for business confidence. Figures from Deloitte have shown that many business directors are now fearing the worst, that the ongoing recession will last beyond the end of 2012 and this will impact upon the UK’s ability to recover as well as affecting the ability to find business funding and investment for new projects.

Finance directors believe there is a one in two chance that the double dip recession will last until the end of the year. This has clearly impacted on their business plans, with four out of five believing it would be better to put off investment plans until the economic strife had evened, or at least significantly lessened.

Deloitte’s findings here have been echoed by BDO, which found that business confidence was in fact at its lowest levels this year. Lloyds TSB’s report on business activity has also found that growth has now slowed to the weakest levels in the past seven months.

The double dip recession is not the only factor denting business confidence to such a degree. The eurozone is also an ongoing concern for directors, especially when the probability of one or more countries leaving the Euro be the end of 2012 is estimated at 36%. Additionally, nearly 30% have already put contingency plans in place.

This all shows the link between macroeconomic circumstances and their influence at the grass roots of business.  It also shows the importance of knowing where the challenges lie for businesses, and how to make sure growth isn’t sacrificed /

95% of finance directors believed that the current financial and economic situation was above normal in terms of the uncertainties they faced. This has a negative effect on the outlook of businesses when they don’t know what circumstances they’ll be facing in the mid to long term. Whether or not the ongoing business confidence issues will impact heavily on the second half of 2012 is yet to be seen, but it looks like it could have a big effect – and definitely not a positive one at that.

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