Business confidence 'hits new low', says survey

car plant in Sunderland The zigzagging economy is putting businesses off investment, BDO warns

Confidence among UK businesses hit its lowest level in at least 21 years last month, a survey suggests.

Accountancy firm BDO, which published the survey, said it suggests the economy will struggle to grow in the first quarter of this year.

That is despite signs of improvement in the labour market, it said, with firms intending to hire more staff.

The survey gauges optimism in business performance and the economy over the next six months.

BDO's Optimism Index fell to 88.9 in January, well below the score of 95 needed to indicate growth.

That is the lowest level recorded since the survey was launched in 1992.

Peter Hemington, a partner at BDO, said the findings suggested businesses were becoming used to the lack of sustained growth in the UK economy.

'Zigzagging growth'

"It seems the damaging effects on businesses of five years' zigzagging economic growth has left them wary of making concrete plans for expansion and resigned to the 'new normal' of economic stagnation," he said.

"To end this cycle, it is imperative that the government implements plans to expedite growth."

Continuing weak economic growth has raised concerns of a triple-dip recession early this year, extending a recessionary period that began in 2008.

The continued pessimism came in spite of apparent improvements in the labour market.

BDO's Employment index rose in January, indicating an improvement in the hiring intentions of businesses over the next six months.

Optimism within the manufacturing sector also improved.

Aerospace company BAE Systems, the UK's largest manufacturing employer, has announced plans to recruit nearly 400 new apprentices in 2013, the highest number it has recruited since 2008.


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  • rate this

    Comment number 55.

    40 JCisJD
    Yes, I listened to that promotion by MoneyWeek. Did you cut and past it?

    Subscribed to it for years - good journal. I also remember lots of ads for high interest accounts based in Iceland too. So, six of one and half a dozen of the other. (no bbc - not libel it's in the public domain).

    It's my view that we are in this cr*p because of fraudulent activity by banks globally.

  • rate this

    Comment number 54.

    One of our biggest exports are cars, from companies owned by other countries. says it all really. Even our own government are not willing to invest in companies that will be our core British businesses.

    Overseas investors will transfer their business elsewhere as soon as an opportunity arises. Last year Ford transit van manufacture moved to Poland, with money supplied by UK taxpayers.

  • rate this

    Comment number 53.

    While it is true that FDR said the "Only Thing We Have to Fear Is Fear Itself", I am afraid that his New Deal amounted to so much more than a bit of QE for the banksters.

    The name New Deal implied the reenfranchisement of a vast proportion of the population who had been cut off from the common wealth.

    If this does not strike a chord with you today, then you are in the top 20%.

  • rate this

    Comment number 52.

    Talk the economy down and ultimately it becomes a self-fulfilling it up and the opposite becomes true.

    Here's a radical thought. How about BDO & other "experts" take time to report on the many positives out there rather than constantly reporting doom and gloom?

  • rate this

    Comment number 51.

    Every time we read one of these articles we are told about weak growth and a lack of making concrete plans by business for the future.
    Well thats not rocket science due to the lack of spare money on the high street. People are buying what they need and shopping around more now for a bargain,if you get the price right you will sell An item is only worth what people are prepared to pay for it.

  • rate this

    Comment number 50.

    What a suprise - couldn't have seen that coming. The Liberals should hang their heads in shame in allowing the Tories to destroy everything they touch. Hope both parties get a hammering at Eastleigh

  • rate this

    Comment number 49.

    Business confidance is low?
    Just business?
    How about
    Everyone's confidance in the economy is low, apart from 2 people who's knowledge of economics has no real world basis but happen to be running the country.

  • rate this

    Comment number 48.

    With government austerity policies producing no growth, banks in trouble almost weekly for some sort of "fraud" and unemplyment rates sky rocketing this comes as no surprise. People just haven't got any money these days

  • rate this

    Comment number 47.

    You can't grow unless you are able to sell your products to those who can afford to buy them. Economies on the Continent, our biggest export market, are in decline. Under those conditions, even zero growth could be seen as a bonus, as we are just about keeping our heads above water while those around us are sinking.

  • rate this

    Comment number 46.

    After 5 years of recession and back-breaking effort, I have sold my business and am having a break from the work nightmare. Whatever you try and do, it's tough because of a lack of certainty and confidence. Customers delay and put off because they are unsure of the future. This creates a domino effect. I'll go back into the market when it starts to look brighter. That's a couple of years away.

  • rate this

    Comment number 45.

    The fundamental problem is the ignorance, indeed rejection, by UK government and business of how the financial world has changed since the crash. Both try to raise their funding through Jurassic traditional banking channels that no longer exist. It's time we caught up with the rest of the world by way of infrastructure and business funding before we become a backwater of the global economy.

  • rate this

    Comment number 44.

    The article is getting slated but the BBC are merely reporting facts of a survey. If they suppressed it, they would have been slated in the other direction.
    I was recently in the BA Heathrow Business Lounge and I can say that there has been a definite shift in the occupants. I saw one disheveled chap enjoying a Stella. This is the sign of the times. Business is changing....

  • rate this

    Comment number 43.

    Apparently this is survey is 'a weighted average of surveys published by the CBI, Bank of England and the Chartered Institute of Purchasing and Supply', and so is a great example of recycling to promote the BDO brand. Good old Mervyn (should be Eeyore) at the bank is always talking down the economy. the sooner he goes the better, then we can all be more optimistic!

  • rate this

    Comment number 42.

    Having seen global business murder the economy and now the food chain, I am really hoping that UK businesses will do well out of this and we can get back to basics
    We should support them (and so should the government)

  • rate this

    Comment number 41.

    Personally I think the BDO have hit a bulls eye with this survey.

  • rate this

    Comment number 40.

    & this is on the back of a FALLING £!

    The price in the shop window might have come down but if there is no buyer, exports will still remain flat

    Hang on tight everyone the collapse is speeding up again!

    As Germany & the like pull their gold back they know the Bond apocalypse is not far away !

    Get out of Debt NOW before interests have to go up to deflect inflation which everyone knows is 6-8%

  • rate this

    Comment number 39.

    Hey, don't shoot the messenger in these comments.This is just one survey amongst many. No doubt there's no boom but that would be counter-productive pulling in imports and raising inflation. Just remember interest rates are at an all-time low so those in work are in a good-ish position. It's up to everyone who can to stop winging and do something positive. People, not Government create jobs.

  • rate this

    Comment number 38.

    My money printing business is really taking off. We're up 375 Billion on last year and I see no stop to it.
    Thank God we don't make anything anymore as most white goods or similar were rubbish.
    1.4 trillion and rising by 80 billion a year, a real sound footing for business. When do the cuts and tax raises come?

  • rate this

    Comment number 37.

    The BBC has form, unfortunately. No morning is complete without a report revealing how utterly crap the UK is.

    As someone who works in manufacturing industry, I'd say this report is questionable. There are countries in the EU that really do have big problems, but in general, manufacturing has adjusted to a new normality and is getting on with it, here and in other EU countries.

  • rate this

    Comment number 36.

    @21.Theresa Mayhem
    As a consumer, I also have no confidence. I am saving whatever spare cash I have, instead of spending it on mindless consumer goods"

    Absolutely. We must move away as much as we can from consumer debt. How many people maxed-out their credit cards and mortgaged themselves to the hilt yet still had holidays in the sun, giant tv's etc but got most of it on loan?


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