With business confidence levels currently lower in the East of England than in any other region of the UK, financial and business advisers Grant Thornton says it’s now more important than ever in such uncertain times for local organisations, communities and individuals to work collaboratively to create a more productive and progressive economy at all levels.
According to the latest ICAEW National Business Confidence Monitor (Q1 2019), UK business confidence has fallen further into negative territory, reaching to the lowest level for a decade. Optimism remains weak across all regions with businesses in the East of England the most downbeat, followed by those in London and the West Midlands.
Political and economic factors, not least Brexit, have undoubtedly influenced this decline, with the report suggesting the East of England is the most reliant region outside London on migrant workers and therefore more strongly impacted.
Hazel Platt, Practice Leader of Grant Thornton’s Chelmsford office and the firm’s three other offices in East Anglia, comments: “It’s difficult to recall another time when the UK has faced greater political and financial uncertainty. So, it would be a minor miracle if the current climate wasn’t adversely knocking business confidence.
“The ICAEW report shows firms in the East of England are the most subdued but we should not necessarily see this as a reflection of poor business performance. This is highlighted by our latest ‘Limited’ studies which found the 100 largest businesses in each county across the region have still achieved increases in turnover, profit and in many cases employment.
“Many organisations across the region are of course feeling the impact of Brexit uncertainty but despite an apparent gloomy outlook, we are seeing many ambitious businesses planning for all eventualities, becoming leaner, more efficient and perhaps more cautious, so can ride the crest of uncertainty.
“With the future still so much up in the air, it’s impossible to predict what lies ahead. However, the East of England economy remains strong and each county has many valuable assets to draw upon. What is needed now is an almost war-time effort from all sectors – private and public, education and not for profit, communities and individuals – to work together for the benefit of all and boost confidence in the region’s ability to weather the current storm and come out smiling again.”
Grant Thornton’s latest quarterly Economic Briefing (January 2019) highlighted the effect current uncertainty is having on the UK’s economy. GDP growth remains slow and is expected to continue on this path for the foreseeable future, while business investment intentions have waned. The deal market is holding up but investors and lenders are understandably becoming more reluctant to commit, and despite hopes the weaker pound would boost demand for British goods, exports have also remained subdued.
Hazel Platt continues: “Against the current backdrop, it’s not surprising East of England businesses, along with those in all regions across the UK, are struggling to remain optimistic. Whatever happens in the months ahead, it’s important for all organisations to get match fit and focus on the business basics: cashflow, retaining and attracting the skilled people you need to move forward, meeting customer needs, getting the most from your current assets and removing unnecessary costs.
“Above all else, companies need to keep calm, carry on and work effectively together so they are ready for change as this is the one thing that is inevitable.”