Just over one year on from the UK’s vote to leave the EU, business confidence in the West has plummeted to its lowest level since the depths of the 2009 recession – with the number of businesses confident of the future down a startling 22% compared with this time last year.
Almost two-thirds of the firms surveyed by Business West cited falling domestic sales, increased inflationary pressures and the lack of a clear roadmap for exiting the European Union as factors contributing to an increasingly gloomy outlook for South West businesses.
Rather than expressing a mildly pessimistic point of view as regards their prospects for growth, an alarming number described how they have entered a period of operational stasis as they try and weather the uncertainty that surrounds them.
Deborah Fox, proprietor of the award winning Fisherton Mill art gallery and cafe in Salisbury commented:
“The next 18 months are going to be very difficult. I think we will just be trying to hold our position and any ideas of growth, which we had for 6 months prior to the referendum, have to be put on hold.”
A similar view was echoed by a Gloucestershire based food wholesaler:
“We've been really hit since June 2016 on £ currency devaluation. Huge uncertainty is leading to paralysis in some quarters.”
Whereas a Bristol manufacturer said that any long-term plans they had for growth had been scuppered and that they were concentrating on surviving ‘month-by-month’.
The figures come as the IMF has downgraded its UK growth expectations by 0.3% - the largest reduction of any advanced economy – compounding fear among businesses that the UK economy might be facing challenging times ahead.
Commenting on the survey results Phil Smith, managing director, Business West said:
“Not since the recession has the UK’s economic outlook tallied so closely with what is happening on the ground for South West businesses. It is becoming abundantly clear that 12 months of political uncertainty triggered by the Brexit vote is weighing on business confidence.
“Now that Brexit negotiations are underway, there is a pressing need for clarity on the government’s negotiating aims. I sense that the concerns and interests of businesses may at last be beginning to be listened to and they will now be calling even more strongly for an approach to Brexit which puts the needs of businesses first and affords them the time and the assistance necessary for adapting to life outside the EU.”
About the Survey:
Data from Business West’s Local Business Survey feeds into the British Chamber of Commerce’s (BCC) Quarterly Economic Survey, to give an indication of business confidence and trading conditions over the past three months.