After months of plummeting profits, slow sales and faster-moving insolvencies, business confidence is finally improving. As Brexit preparations are underway and the economy is finally gaining momentum, businesses are sensing the softer landscape and a more positive sentiment has emerged. As the economy dips and slips, businesses should be aware that the landscape could become harsher but should not let their confidence slip as a result. Business owners should prepare their finances for whatever their sector may encounter.
A long-running business index rose above the long-term average to a reading of 25 per cent in the second quarter, according to Lloyds Bank who conducted the research. This is not to suggest the whole business landscape has been smoothed over, and there are still serious concerns weighing down on firms. Lloyds found that while firms had become more confident in their own prospects, this was not transferring to investment. The poll revealed that the number of firms looking to increase investment in the next six months fell to 12 per cent, highlighting how hesitant business owners are to commit fully to the environment.
Whether the eventual outcome of Brexit works in favour of businesses or not, all owners within the landscape must be prepared. This means having finances that are strong enough to overcome economic disappoints, as well as the employees who will maintain strong productivity levels and work output. At the Credit Protection Association, our debt recovery services free up cash flow and award our Members with fundamental financial confidence.
Uncertainty over the Brexit process remains the biggest risk , with 21 per cent of firms citing it. Over a third of businesses expect a negative impact on business if no trade agreement is reached with the EU. Weaker UK demand was the second-biggest risk.
London firms were the most confident about their prospects, Lloyds found, with an index reading of 31 per cent, while businesses in the South East followed close behind with a reading of 30 per cent.
England’s unexpected World Cup run likely added another boost to confidence, Burton added, although skills shortages remain a challenge for almost two-thirds of firms.