TT180: Find Out What Real Firms Think of the Economic Outlook
In the real world where our clients live, away from bankers and pundits but where services and goods are bought and sold, confidence in the immediate future is falling, at least according to our latest client survey.
But there is one bright spot. Most firms expect to take on more employees in the next six months, which should translate into more spending somewhere along the uneven line of our economic recovery. But there is no disguising the fact that Greater London businesses are still in the doldrums. This particular slump is like a bad head cold, one that keeps returning just when the worst should be over after all that unpleasant medicine. In fact, our survey carried out between August and September found confidence generally lower in all areas than it was in December last year, despite picking up in the first quarter of 2012.
That now seems no more than a temporary bubble of hope brought about by the Diamond Jubilee celebrations and the extended party that was the Olympics. As it turns out, apart from good television and national pride, the Olympics may not have been the great economic fillip everyone hoped. Quite the reverse. There is optimism for future growth, just not for anything much at this moment. The sprigs of optimism detected in our spring survey have withered.
For the first time since we started our surveys last year sales in the last six month failed to reach expected levels for most businesses.
A key finding is that 60 per cent of respondents report sales the same or worse than expected. But better sales in the next six months – which includes the crucial Christmas period – than at the same time last year was predicted by 56 per cent, which is good news.
Capital expenditure is expected to fall slightly, with 58 per cent believing it will remain about the same or fall. Interestingly, 29 per cent of respondents felt that banks were having neither a good nor bad impact on their businesses, with 41 per cent reporting a positive impact. Most firms also now have a more favorable view of banks, which suggests calls are being returned and loans are at least on the table again.
Break down of the survey results by sectors suggests that most uncertainty surrounds the high tech market, with manufacturing feeling most certain about its future.
But the tales are textured. Whilst high tech is uncertain, after a disappointing six months, it is also the most bullish about more hirings and sales over the next six months.
Construction is relatively neutral about how it views the immediate future, although the results showed a slight tilt towards optimism, particularly regarding future sales.
Professional services providers are feeling less confident than they were. Retail is optimistic overall, but pessimistic about future capital expenditure and jobs growth.
Perhaps the sunshine view is that there is clearly not a sense of a world in tailspin any longer, just one yet to recover its footing properly, and still faltering, warily, towards better days.Talk to Barnes Roffe today