ICAEW Quarterly Confidence survey September 2017

Our Corporate Finance Partner, Steve Plaskitt, attended the latest presentation of the ICAEW Business Confidence Monitor survey for Q3 of 2017. It was at Judges, Yarm and took place on Tuesday 19th September 2017. Steve shares the findings in this blog post…

The Event

Keith Proudfoot of the ICAEW and Mauricio Armellini from the Bank of England were presenting. They were great at making sense of complicated economic data and graphs.

The idea is that the graphs of business confidence closely follow GDP. There is a useful comparison of how confident the North East community is compared to the rest of the UK. For example, how the construction and property sectors fare nationally. A negative result shows that FDs expect performance to be worse than a year ago and a positive result shows businesses are confident of growth.

Findings

In short, we are all less confident now than three months ago – though it is not nearly as bad as one year ago!

Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017
North East -13.0 -0.2 -2.4 +5.6 -9.9
UK -10.2 -9.8 -8.7 +6.7 -8.0
Construction -19.4 -8.0 -5.5 +3.3 -5.0
Property -26.5 -14.4 -22.5 +2.6 -12.6

Whilst the property sector is below the UK in confidence, the construction service sector is relatively confident. This reflects a less negative view on forecast housebuilding and infrastructure spend.

The accountants/FDs of businesses were preparing for wage costs, input costs and inflation rising faster than selling prices.

Compared to the UK, more North East FDs were confident in increasing their exports. However, they were less confident about increasing their investment in capital equipment and Research & Development.

Economic and political uncertainty was eroding business confidence. Spare capacity and uncertainties were thought to be supressing the growth of investment in equipment, products and people.

Conclusion

Whilst it seems that there is more bad news around, we should not forget the benefits that exporters are currently seeing. We can take comfort in knowing that the Brexit negotiation process will soon become clear and that the data shows we are more confident than this time last year!

For further advice or assistance, please contact Steve Plaskitt on 0191 285 0321 or email steve.plaskitt@taitwalker.co.uk

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