The latest ICAEW UK Business Confidence Monitor (BCM) shows that business confidence has improved but is still in negative territory. This implies only modest GDP growth in Q1 despite global expansion and below the expected growth of the Eurozone.
Key findings this quarter
The Confidence Index increases from -3.4 in Q4 to -1 this quarter, but sentiment remains negative.
Sales growth continues to drift gradually upwards though the trend is not strong, with export slightly weaker than domestic sale.
Selling prices remain subdued, squeezing profits and holding back wage increases. Input prices have risen, perhaps reflecting higher oil prices.
Availability of non-management skills and particularly business regulatory requirements are becoming more widespread as an growing concern.
Investment in staff development is starting to pick up, together with R&D, though modestly. Capital investment continues to grow slowly.
Different sectors are facing different conditions and challenges. Banking, Finance & Insurance, and Property sector in particular, lack confidence which is impacting adversely on London.
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