The UK looks set to avoid a triple-dip recession according to new findings from a report published by The Institute of Chartered Accountants in England & Wales/Grant Thornton UK Business Confidence Monitor (BCM).
The report suggests that Business Confidence is at its highest level since the second quarter of 2011, and it is hoped growth will resume this quarter. It also goes on to say that BCM Confidence Index stands at +12.8, an increase from +4.2 in the fourth quarter of 2012, where it is suggested GDP will grow by 0.4% in the first quarter of 2013.
The current business mood, described as ‘cautiously optimistic’, went on to show that despite the current slow growth in world trade, businesses expect export performance to pick up over the coming year. This coupled with the news of an increase in hiring and a decrease in unemployment is extremely encouraging in a period of strain and struggle for many UK businesses and the UK economy.
The report isn’t entirely positive however, with a number of issues being raised by several companies. There is a general concern about the availability of management skills as companies look to increase headcount, with the report highlighting many businesses are concerned that the right people will not be in place when the recovery does start. This is also shown in the cautious approach many businesses are currently taking with investment in the recovery, highlighted by continued low capital investment and salary growth.
However, the good news from BCM seems to be contradicted with the report which came last Friday (5th March 2013) with the shock announcement that the Purchasing Managers’ (PMIs) Index for UK manufacturing was down to the lowest reading since October. The index fell from 50.8 in January, to 47.9 in February; way below the 50 no change mark.
So, what is happening? Is the general economy improving but manufacturing in decline? If so, where is this growth in exporting to come from? Are things looking up or looking down? Clearly the experts can’t agree. Any answers?