UK business confidence hit by general election and Eurozone worry
Uncertainty surrounding the outcome of the general election, the threat of a skills shortage, and a weak Eurozone has hit UK business confidence – but it is still high by historic standards.
A confidence index produced by the Institute of Chartered Accountants in England and Wales (ICAEW) fell to 28.6 for the fourth quarter of the year, down from 32.3 last quarter.
Confidence reached its highest level for a decade earlier in the year but has since fallen back slightly. One reason is the weak Eurozone economy – the UK’s largest export market.
“Exports have been weakening, while domestic sales are much more buoyant,” said Michael Izza, ICAEW chief executive.
However, businesses remain confident overall, with hiring plans at their second highest level since the financial crisis of 2008.
Another finding of the survey is the report of a skills shortage – a concern that has previously been voiced by a number of recruitment firms.
A fifth of surveyed firms reported a lack of availability of non-management skills. The skills shortage is most prevalent in the construction where 33 per cent of firms said they were struggling to with getting non-management skills.
“The outcome of the upcoming general election is creating uncertainty amongst business leaders not only around what shape our domestic future might take, but potentially also our place within the EU,” said Scott Barnes, chief executive of Grant Thornton UK LLP.