The latest ICAEW Business Confidence Monitor (BCM) shows that business confidence has moved back into positive territory, its highest level for two years. Regulation and staff turnover are becoming bigger challenges for businesses.
Key findings this quarter
Confidence is clearly positive this quarter, at +7%, and this increase is apparent across all types of company. Companies that export are more confident than those that don’t.
The expansion in sales is stronger than in 2016 and 2017 but not yet back to the rates seen in the two years prior to 2016. It is, however, evenly balanced across domestic and export markets.
Improved profit growth is supported by sales growth and restraint on wages. Input price inflation remains high by the standards of recent years, while selling price growth stays low.
Slightly higher profit growth together with improved confidence is supporting increases in capital investment, Research & Development (R&D) and staff development.
Regulation is the strongest and most widely-reported growing challenge for businesses, reflecting a variety of legislation introduced.
Increasing concern about staff turnover is also on an upward trend, particularly in Construction and Business Services sectors which employ large numbers of migrant workers.
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