East Midlands business confidence improves but concerns remain
Business confidence in the East Midlands has improved to -5.2 in comparison to -12.2 a year before, according to latest figures, while a high proportion of companies (43%) are expressing rising concerns over customer demand.
According to the latest ICAEW Business Confidence Monitor (BCM), domestic sales and export growth are on upward trend and are both above the UK average in the current quarter.
There has been an increase in profits growth, from 1.2% in Q1 2017 to 3.1% in Q1 2018, while research and development budgets have grown at a rate above the UK average, at a rate of 3.3% in Q1 2018, which is close to the historical record for the region.
On the outlook for 2018, companies expect that growth in profits will continue throughout the next year, with an increase of 3.4%.
The proportion of companies that are increasingly concerned about the supply of managerial and non-managerial skills has risen to 20% and 25%, respectively, from 9% and 20% in Q1 2017.
Nigel Hastilow, ICAEW East Midlands director, said: “It is very promising to see business confidence index in the East Midlands improving after a low period in 2017. The growing positivity is mainly down to domestic sales and export growth following an upward trend and therefore resulting in profit growth.
“Businesses in the East Midlands however are still facing turbulent times. The uncertainty surrounding the UK’s withdrawal from the EU is leading to fewer incoming migrant workers which is likely to be one factor behind the lack of both managerial and non-managerial skills.
“The region also reports the highest proportion of businesses operating below capacity in the UK, an explanation for this may lie in the manufacturing intensive structure of the region.”
