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Refocus on Cash Flow Could Boost Sluggish Productivity

The government must turn its focus towards improving the domestic economy if it wants to break out of the GDP growth “slow lane”, according to the UK’s biggest business lobby group.

As Britain edges closer to the Brexit deadline next year, its public image has never been more important, particularly in how it keeps pace with rival economies. The easiest way to boost domestic strength is through exports, ensuring factories and manufacturers are working at their best. While HMRC recently revealed an upturn in export figures, levels of productivity are still underwhelming.

The Confederation of British Industry (CBI) is set to publish a gloomier outlook for the UK economy, with unavoidable weather conditions in the first quarter of the year dragging down productivity levels. The CBI expects GDP growth of 1.4 percent in 2018, down from a previous estimate of 1.5 percent. Other issues such as prolonged political uncertainty have affected the sluggish productivity, with morale amongst workplaces decidedly low.

The HMRC reported exports had risen by 6.5 percent to £244.6 billion, but with productivity growth still sluggish, factory employees are not working at a fast enough pace. The activity within British factories can be improved by renewing attention to cash flow and ensuring the efficiency of all credit control procedures. The intervention of a third party controller can make all the difference, freeing up cash flow and giving business owners the opportunity to shift priorities back towards their own business.

At the Credit Protection Association, our debt recovery services can provide our members with the financial confidence to refocus on productivity, investing in new technology, equipment or new training schemes for employees.

Rain Newton-Smith, CBI chief economist, said: “Productivity weakness is a structural challenge for the UK economy and a drag on living standards.

“There is much within the UK’s control that can be acted on now,” she added, citing a new runway at Heathrow and more technical skills training in particular.

Raising productivity is key to raising living standards for workers: if workers produce more firms are theoretically able to up their pay.

The CBI expects the Bank of England to raise interest rates three times by the end of next year: once in the third quarter of 2018, and a hike at both the start and end of 2019.

The positive analysis released by HMRC found that businesses were also taking advantage of global interest as the number exporting to non-EU countries rose to over 47,000. The most popular non-EU destinations include the USA, that 19.2% of exporters sold goods to, Australia (7.3%) and Switzerland (7.2%).

Productivity is a hard thing to sustain, with economic and weather conditions consistently acting as deterrents to growth. With the Brexit deadline inching closer it is good news that our exports are proving strong, but our factories will need to keep pace with demand. British businesses should pay close attention to their finances, ensuring they have the cash flow to allow for the new equipment that could inspire stronger output levels.

To achieve this, it is strongly recommended that business owners pursue third-party companies for aid. Rather than bank loans or lending platforms, credit management companies will focus on improving finances as well as freeing up extra cash.

At the Credit Protection Association, our Members have utilised our debt recovery services for new opportunities within their business, from new technology and equipment to office renovations. The smallest changes within the office can alter employee morale and encourage a more intense concentration once stationed at workstations.