A Slow but Steady Recovery

The UK is on track for a slow but measured recovery with businesses cautious in the face of political and economic uncertainty. This is the message from the latest Institute of Chartered Accountants Business Confidence Monitor. The quarterly survey shows that companies are operating within their means rather than taking on new risks.

Business financial indicators in the survey suggest that, although companies expect growth, they are still very wary about increasing investment and taking on new employees. Increase in capital investment for the coming year is expected to be a modest 1.3% compared with a fall of 0.8% in the previous year. Staff numbers are expected to increase by 1.1% compared with a 2% drop last year. Although encouraging, both increases are far below pre-recession levels and demonstrate the guarded approach companies are taking.

On a more positive note, nearly six in ten businesses are more confident about their economic prospects over the next 12 months compared with the previous year. This compares with only 19% 12 months earlier. There has been a broadening of recovery in more sectors, regions and sizes of business. The data also points to the beginnings of a rebalancing of the economy, something that had to happen. Although welcomed, it will be a long time before we reach the growth and indeed expectations of businesses compared with those heady pre recession days.

Although the survey makes generally positive reading, the feeling amongst clients of Balance Accountants is still very cautious and most business owners that we talk to still see the real recovery to be some way off yet.

Post written by Ashley Barrowclough.
What is your experience of the recovery?  Please post your comments below.

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