By Marcus Leach
The latest Institute of Chartered Accountants in England and Wales (ICAEW) and Grant Thornton UK Business Confidence Monitor (BCM) shows business confidence has fallen in the third quarter of 2011.
The Confidence Index stands at 8.1 in Q3 2011, down from 13.7 in Q2 and the lowest level since Q3 2009 when the UK was still in recession. The Index has been on a downward trend since a post-recession bounce-back that started in late 2009 and peaked in the first half of 2010.
Though in part some fall in the Confidence Index is expected following the post-recession bounce-back, the most recent decline in the index is also likely to reflect fears about the strength of the global economy.
In conjunction with lacklustre growth in the UK, the US recovery continues to disappoint while the eurozone remains embroiled in a major sovereign debt crisis.
The overall share of businesses more confident about the coming 12 months is down from last quarter, at 39% compared with 45%. This is the lowest share since Q2 2009. On a slightly encouraging note, the share of businesses less confident about the future has not increased sharply this quarter.
“The perception in business is that though some pointless old regulations are going there is still a stream of new ones coming through," David Ingall of JWPCreers said.
“Confidence is ephemeral and easier to lose than to win. Most people did not realise that the effects of the recession were going to be with us for years rather then months or weeks.
“Governments try to give the impression that at the drafting of a press release or a bill to go before Parliament, the problem is solved. Perhaps the electorate is now learning that is not the case but equally actions, not words, on the part of government are essential.”