London downbeat despite optimistic signs
Business confidence in London remains in negative territory at -7.8, according to the latest ICAEW Business Confidence Monitor (BCM) with uncertainty surrounding the Brexit negotiations and an increasingly unstable government seen as contributing factors.
According to the latest London BCM domestic sales growth has recovered, and is roughly on a par with a year ago, but exports growth is on an upward trend and at 4.9% in Q4 is growing at its fastest pace since Q3 2011.
At the same time, overall sales volumes are rising at a faster rate in the year to Q4 2017 than the preceding year.
But the outlook for 2018 remains uncertain:
- Companies are predicting volume growth to slow slightly. Input prices are predicted to rise by just 1.4% and profits growth are still predicted to maintain a rate that is very similar to that achieved this year, at 4.9%
- Lack of confidence though is manifesting itself in weak capital investment intentions. Predicted growth of 1.6% in the year ahead is down on the 3.2% to this year
Andrea Dunhill, ICAEW London Director, said: “The continued negativity in London is to be expected with the current economic and political climates as they are, with both Brexit negotiations and government conflicts clouding vision for the future. As EU negotiations progress, and any implications of the bank base rate rise surface, businesses will hopefully be able to predict a clearer vision for their outlook.
“Political and economic uncertainty is inevitable during the current period of such vast changes, but London businesses need to look for the light and remember the importance of supporting the future by investing in technology, training and development, as well as new products and services to help drive economic growth.
“Despite the low confidence, there are some signs of optimism, with domestic sales growth roughly on par with last year and export growth following an upward trend. If this continues, it is likely that businesses will be more enthusiastic about future prospects.”
For more information go to www.icaew.com/bcm
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