Business confidence has dropped to the lowest point this year, falling for the fifth consecutive month.
According to a new business trends report by accountants BDO LLP, economic prospects in the UK continue to look gloomy as confidence in manufacturing and services sectors fluctuates.
Measuring business performance, BDO’s optimism index has hit a seven-month low falling from 93.5 in June to 93.1 in July.
The figure has decreased from a high of 98 in the first quarter of the year and moved even lower than 95, the index’s marker that crucially highlights growth.
The firm’s optimism index predicts the economy will contract for the rest of the year.
BDO partner Peter Hemington said: “This month’s figures serve as a stark reminder of the continuing difficulties the UK economy faces, with zigzagging business confidence undermining the improvement in confidence that we saw at the start of 2012.”
In a separate report Lloyds TSB says the majority of English regions have seen business activity fall in July.
The bank’s regional purchasing managers’ index showed six out of nine regions saw a downturn, which Lloyds also attributes to poor performance in the manufacturing sector.
It says the North-East of England saw the sharpest fall in private sector manufacturing output, the steepest for the area in more than three-years.
The east of England and North-West also posted particularly marked falls in business activity during July.
According to the index, the main regions to buck the downward trend were London and the East Midlands, which both enjoyed output growth.
It comes as a survey by the Engineering Employers Federation (EEF) revealed a more positive outlook with a boost to UK manufacturing.
It showed two-fifths of British companies have brought production back to the nation amid fears of natural disasters and the global economic crisis.
EEF’s chief economist Lee Hopley explained: “In recent years manufacturers have been hit by a host of unforeseen events, which has seriously tested their supply chain monitoring and business continuity planning.
“This can also create opportunities to re-shore production and rebuild key manufacturing with companies bringing some production in-house and using local supply chains.”
Source Article from http://news.sky.com/story/971804/manufacturing-sets-gloomy-outlook-for-uk
