Each quarter, the ICAEW publishes its confidence monitor. Based on the responses of around 1,000 senior business professionals running all types of businesses across the UK, it provides a snapshot of past performance and future business prospects.
Confidence moved into negative figures in quarter 3 this year – a condition that we last saw in at the end of 2011. The factors underlying the lack of confidence rage from hard numbers (declines in sales growth and profits) to a high degree of uncertainty about the economy.
Inflation is also having an impact on confidence as higher fuel costs, downward pressure on salary increases and rising prices are gradually eroding customer spending power.
Confidence in some regions was better than others in the last quarter. Within our region the confidence level in Beds Bucks and Herts has recovered significantly whilst London has slipped further into the negative.
Here we highlight the key measures and predictions of relevance to our business clients.
Click here to view our Confidence Monitor Infographic
How should you respond?
Reacting to research like the confidence monitor can turn it into a self-fulfilling prophecy. Putting your head in the sand is no better an option.
In times of uncertainty, it becomes even more important to understand the drivers of your business. A robust business forecast can help you predict the impact of increased supplier costs, reduced sales and excess capacity on your profit. More importantly, it can help you decide what to do about it and when.
For help and advice on predicting your business finances, contact Adrian Le Roux