State of the Region: Economic confidence levels remain low
ALMOST 90% of businesses in the West Midlands are no more confident about the state of the UK economy than they were 12 months ago.
The vast majority (91%) of firms in the region also think there will be no improvement in the situation during 2012.
The findings are published in TheBusinessDesk.com’s State of the Region survey 2012, which was completed by hundreds of business people across Yorkshire, the North West and West Midlands.
The survey was compiled with support from lead sponsor DLA Piper, and supported by PwC and the CBI.
Asked for their opinion on the state of the UK economy, just 13% of respondents said they were more confident than they were 12 months ago, while just 9% thought 2012 would see any upturn.
Almost half (49%) thought the coalition government had had the impact they expected during 2011, however, 57% thought the level of cutbacks imposed by Westminster was too severe. Just 2% thought the coalition should have maintained public spending until the economy was firmly out or recession.
Charles Cook, Head of Corporate for DLA Piper in Birmingham, said: “As 2011 drew to a close it became increasingly evident that hopes for a 2012 recovery were likely to be a little optimistic – a view supported by key decision makers in business.
“Less than 10% of business leaders predict an economic upturn over the next 12 months and almost half believe that conditions will get worse. This opinion is supported by official statistics. The Office for Budget Responsibility (OBR) recently revised its forecasts to predict that the UK should not expect to see a return to its pre-recession peak until early 2014, whilst the National Institute of Economic & Social Research estimates a 70% risk of a double dip recession.”
“However, in the face of this challenging environment businesses are showing a determination to reassess their strategies and to take decisive action rather than ‘wait it out’ until conditions improve around them. 66% declared their intention to engage in some form of transactional activity in 2012. Approximately a fifth expect to make acquisitions and another fifth anticipate refinancing or fundraising activity,” added Mr Clarke, left.
“Attitudes towards the Coalition Government show a slight improvement. Last year the West Midlands was by far the most pessimistic region in its attitude towards the Government. More than half believed that it would have a negative impact upon the economy compared to just 20% in the North West and 12% in Yorkshire.
“This year more than a quarter of respondents reporting that the Government had performed better than expected. This is perhaps a reflection of measures within the Chancellor’s Autumn statement aimed at encouraging growth through investment in infrastructure and the regions, which were welcomed by local business leaders.”
Mark Smith, regional chairman at PwC in the Midlands, left, said: “Most private companies in the region are expecting the situation with regard to access to finance to remain the same during 2012, but 23% are expecting it to improve.
“While access to finance remains an issue, 18% of private companies in the region say they are likely to consider an acquisition in 2012 and slightly more are expecting to refinance some or all of their debt.”
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Tomorrow: How the Regions Compare
