Brexit blamed as business confidence falls, accountancy chiefs say
Business confidence across Cumbria and the north has fallen thanks to the continuing uncertainty around UK politics and Brexit.
The year's third quarter saw confidence dip further into negative territory - down to -9.9), with the government accused of losing its focus on industrial policy as it grapples with its "hestitant" EU negotiations and the reality of a hung Parliament.
That is the picture as revealed in the latest Business Monitor report from the Institute of Chartered Accountants in England and Wales (ICAEW). British businesses are adopting a more cautious, wait-and-see approach, says the Monitor.
Keith Proudfoot, ICAEW's regional director for the north said: “The fall back into negative territory in the north is not unexpected.
"Since the announcement of the general election, a vacuum has been left with Government’s attention swallowed by a hung parliament and the start of EU negotiations.
"The industrial strategy has been lost in the void, coupled with no clear signal towards post-Brexit policy.
"As a result, businesses cannot see through this haze of uncertainty and are struggling to look further than the end of the next quarter in terms of their decision making.
“If they haven’t already, businesses need to look beyond the next few months to a future where innovation and investment now will create a longer term return.
"They need to be investing in talent, new products and services as well as exploring new markets to help ensure they are positioned to take advantage of the opportunities that will be there once the UK leaves the European Union.
"Government also needs to articulate what business should expect in terms of transitional arrangements as they need to be planning now and cannot wait until early 2019 to find out.”
The group has predicted that investment growth will fall back across almost all sectors nationally.
Capital investment continues to grow slowly.
While job creation is positive it shows no signing of picking up. There was a similar picture for staff development and R&D budgets which are growing slower pace than revenues.
Domestic sales growth has been steady through 2016 and 2017 to date and overall export growth is being maintained, but weaker sterling has failed to deliver a significant improvement and expectations are falling as sterling edges up.
Meanwhile, 24% of businesses report a shortage of non-management skills is a greater challenge to their business than a year ago. This may reflect a fall in net immigration into the UK since the Brexit vote and uncertainty over immigration policy.