ICAEW Report shows Q1 Construction Confidence Growth

Corporate Finance Partner, Steve Plaskitt, attended the Q1 2017 regional Business Confidence Monitor (BCM) event on 16th March 2017 hosted by Keith Proudfoot and shares his experience below…

Each quarter the BCM asks a number of simple questions of business owners, such as ‘are you more confident for the next 12 months than you were last year?’ and ‘are you expecting turnover growth in the next 12 months?’

The findings are then aggregated and have been a very good predictor of quarterly GDP as well as a source of other data split by region and by sector.  Currently the BCM is predicting a GDP of 0.1% for Q1 2017. More details can be found at www.icaew.com/bcm.

The data is analysed so that in simple terms a positive score shows optimism and a negative score shows pessimism.

The good news is that the construction sector is forecast to be slightly less pessimistic than the UK as a whole – and that the confidence is strengthening faster as shown by the following table.

Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Change
UK11.40.8(10.2)(9.8)(8.7)+ 1.1
Construction20.87.4(19.4)(8.0)(5.5)+ 2.5

Perhaps this positive outlook is due to the belief that the Government is to invest in infrastructure and housing in order to help the economy.  The table does show a strong recovery from the pessimism shown in the Q3 2016 data in the immediate aftermath of the Brexit vote.

When analysed by region, again the North East appears to be more confident (or as the score is negative, perhaps that should be less pessimistic!) than the UK as a whole.

Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Change
UK11.40.8(10.2)(9.8)(8.7)+ 1.1
North East3.56.5(13.0)(0.2)(2.4)– 2.2
Yorkshire and Humber3.05.51.0(2.0)(16.9)– 14.9

Its great to see North East businesses faring better than others in the UK though not so good to see a decline in the Q1 score. Finally we should perhaps spare a thought for those in Yorkshire and Humberside and lets hope their sudden decline in optimism is only temporary and not an accurate prediction of the future.

For further information or advice, please contact Steve Plaskitt.