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Business confidence falters following protracted Brexit negotiations

11 December 2017

 

- Business optimism falls to seven-month low -

- Business output falls to a 23-month low -

The confidence of UK businesses is faltering against the backdrop of protracted and unclear Brexit negotiations, according to the latest Business Trends Report by accountants and business advisers BDO LLP.

The new report reveals that the BDO Optimism Index - which indicates how firms expect their order books to deliver over the coming six months – has declined to 102.05, from 103.17 in October. It now sits at its lowest level since April this year and is only just above the long-term trend of 100.

The dip in optimism is also being reflected in BDO’s Output Index, which indicates UK business output in November. The index has fallen a further 0.09 in November to 98.99, below the long-term trend and at its lowest reading in almost two years.

Firms’ outlook for the future is being dampened following a challenging end to the year in which clarity about the UK’s exit from the EU remains unclear, despite the agreement of a deal last Friday, and the Office for Budget Responsibility revised growth forecast for the UK economy down to 1.4 per cent.  

The slowing performance of the UK’s services sector – which makes up the majority of UK business output - is driving the decline. In addition to the UK’s dwindling economic performance, the sector is being effected by slow productivity gains. BDO’s Services Output Index fell from 99.24 in October to 98.95 in November.

Commenting on the findings, Peter Hemington, Partner, BDO LLP, said: 

The unprecedented political and economic climate is stunting the growth of UK business. The continued absence of clarity about our potential Brexit trade deal leaves businesses lacking confidence to make important decisions regarding future investment and direction

The government needs to be clear with all UK businesses about its Brexit plan and what the most likely outcome will be. Only then will UK businesses be able to make informed decisions and the necessary preparations to protect and encourage future growth.”

To download BDO’s New Economy report and find out more visit www.neweconomy.bdo.co.uk

- Ends –


Overview of the BDO indices:

An overview of all four indices is provided in the table below, detailing figures for the last three months and the same month of the previous year, to allow for comparison.

 

November 2017

(figures for this report)

October

2017

September

2017

November 2016

(equivalent report last year)

BDO Optimism Index

102.05

103.17

103.07

100.89

BDO Output Index

98.99

99.06

99.95

99.22

BDO Inflation Index

100.25

99.48

100.88

104.23

BDO Employment Index

111.06

111.39

111.68

107.01

 

Notes to editors

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high growth businesses that fuel the economy. 

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed. 

BDO LLP

BDO LLP operates in 18 offices across the UK, employing 3,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has revenues of £405m and is the UK member firm of the BDO International network.

BDO’s global network

The BDO global network provides business advisory services in 158 countries, with 68,000 people working out of 1,400 offices worldwide. It has revenues of $7.6bn.


Contact

Alisa Charkova
at Teneo Blue Rubicon on behalf
of BDO LLP
 

Mob: 07500 866267
Tel:  0207 260 2783
Email: bdo@teneobluerubicon.com