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Business confidence: it’s not all doom and gloom

Author: ICAEW Insights

Published: 08 Dec 2022

In the wake of the UK Regions Economic Summit, where ICAEW launched the findings of its Q4 Business Confidence Monitor, one of the event’s Regional Chairs Neil Coupe shares his upbeat take on the economic climate.

The biggest fear for business is fear itself, according to Schwing Stetter Finance Director Neil Coupe. “My major concern at the company I work for is that people are talking themselves into a catastrophe,” he says. “Yet we’ve had a very positive year and the order backlog for next year is looking strong. People are still investing in the products we sell because there are still projects taking place.”

Far from riding the wave of doom and gloom surrounding the cost-of-living crisis, Coupe takes the approach that downturns have happened before, will happen again and they’ll get through it.

Coupe accepts that Schwing Stetter – which sells concrete placement and production equipment to the concrete industry – may be shielded from the worst of the UK’s current money woes as it provides specialist products with long lead times. But he believes that while the government must look after the vulnerable facing hardship during this downturn, there’s no reason why businesses offering great service and value for money can’t thrive.

The construction industry’s biggest challenges 

The most significant concerns facing his industry right now, says Coupe, are:

  1. Staff retention and recruitment
    “There’s lots of demand for labour in the construction sector, so businesses are finding they need to pay their people more to keep them. But if people are treated properly, the strongest companies will keep the best people.”
  2. Inflation
    “It has not been too difficult to pass the price increases on in the sector, but that’s not sustainable in the longer term. The Bank of England thinks that inflation should decline in the second half of 2023, so hopefully the current rate is just a blip.”
  3. Interest rates increasing
    “Many people buy our machines on finance and there’s a world of difference in funding something at 4% interest to funding something at 7%. Hopefully, from what the Bank of England is saying now, things won’t be quite as catastrophic as we were led to believe a few months ago.” 

What can the government do to support businesses? 

For Coupe it comes down to two things: cutting post-Brexit import/export red tape and sticking to house-building targets. “At the moment, every time we import goods from Germany and deal with Customs’ formalities, it’s like death by Excel.” 

He also has concerns that the government’s target to build 300,000 new homes a year is coming in woefully short year on year. “Where will young people live? How will they get on in life if there’s nowhere affordable to live? I think that’s a huge issue in terms of social cohesion and fairness.”

Looking forward

Coupe is positive about the future. “I think people will moan and groan and say how difficult things are, but then we’ll all just get on with things. Hopefully unemployment will stay low and businesses will continue to thrive.”

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