Business confidence down for sixth quarter

BUSINESS confidence in the East of England has continued to fall, according to the latest ICAEW/Grant Thornton UK Business Confidence Monitor (BCM).

The region’s reading of minus 3.5 for the third quarter of 2011 is down from plus 12.9 in the previous survey and a post-recession high of plus 33.3 in the first quarter of 2010, with the figure having now declined for six consecutive quarters.

This quarter’s reading is the lowest in the country and well below the UK average score of plus 8.1.

Despite their gloomy outlook, annual export growth has been particularly strong in the region, at 6.4% in the past 12 months to compared with 4.4% across the UK economy as a whole.

However, it is thought that the continuing economic turmoil in the eurozone and concern over the sustainability of overseas business may be a factor driving down confidence in future business prospects.

Firms are also reporting that business performance has generally strengthened since the final quarter of 2009, when they reported contractions in turnover, gross profits and sales volumes. Turnover growth of 2.9% year on year is reported this quarter, similar to the rate recorded for the 12 months to the first quarter of this year, while annual growth for gross profits and sales volumes are now 2.2% and 1.7% respectively, also broadly in line with the rate of growth seen to the first quarter of the year.

Said Pippa Bourne, Regional Director of ICAEW in East of England “This is still undoubtedly a tough time for business in the region. Bank lending is still an issue for businesses, making it hard for them to invest in plant and staff and kick start the growth needed to bring the region back to a positive confidence score”