Business confidence declining
Business confidence across the nation's businesses has shown a marked downturn over the past year according to the latest National Business Survey conducted by the leading research company Ipsos on behalf of England's Regional Development Agencies.
As one of the largest surveys being conducted in the UK today, the RDA National Business Survey is unique in it's coverage of all parts of the economy and shows that almost half of those businesses who took part, expect the business climate to deteriorate in the next 12 months.
The responses of over 5,000 companies across England and Northern Ireland shows construction, hotels and catering and distribution companies are less confident than those in other industries.
However, whilst business confidence is at its lowest since 2003 and employers indicating that their workforces will grow less quickly and costs will rise more rapidly going forward, long range business optimism is still evident with increased capital investment intentions (+9% on balance*). Companies have also indicated they will increase investment in the training of their workforces (+13 on balance*) and in the development of their products and processes (+ 15% on balance*).
Across England and Northern Ireland 55% of companies businesses feel confident that their employment levels will remain the same in the next 12 months. This builds on the 54% of companies nationally who had reported no decline in employment in the last 12 months.
Businesses have increased their prices to combat the inflationary pressures currently squeezing companies' profit margins as 45% of firms confirmed a lower profit margin for the past 12 months. Transport and rising energy costs were confirmed as the main hikes to firm's cost bases with over 80% citing these two factors as key to a squeeze on profits.
Going forward businesses in England and Northern Ireland will face a difficult trading environment in the next year with slowing domestic order books and rising costs, specifically in energy and raw materials, limiting scope for further price increases rises and putting margins under more pressure than seen in 2007.
Download the topline results for England Download the topline results for Northern Ireland
Technical Note
Questionnaires were sent by post to business in England and Northern Ireland160in April 2008. Reminders were sent to non-respondents in May 2008, along with a "booster" sample. An online survey was also available to postal respondents, and email invitations were sent where addresses were available.
Fieldwork closed on 13 June 2008. 5,235 questionnaires were received.
