A slowing global economy, a rise in late payments, increased costs and the uncertainty of Brexit are having a considerable impact on the confidence of businesses, according to Cumbrian accountancy firm Lamont Pridmore.
Reflecting on the latest data from the Institute of Chartered Accountants in England and Wales’ (ICAEW) UK Business Confidence Monitor, the multi-award-winning firm said it was unsurprising that business felt so unsure about the future, but believe that preparation and planning could help improve business confidence.
Graham Lamont, Chief Executive of Lamont Pridmore, said: “Inaction during uncertain times can be as dangerous as overinvesting. Sitting back and hoping that things get better just simply is not an option and businesses should be doubling their efforts to plan for the future.”
The Business Confidence Monitor for the latest quarter shows that confidence remains fairly negative, with political uncertainty and a potential no-deal Brexit of most concern.
This has been compounded by GDP growth forecasts for the UK which look to be weak, which is also partly the result of an overall slowdown in the world economy.
Graham said that there would always be factors outside of a business’s control to contend with and admitted that these were particularly challenging times, but he believes that with the right advice companies can still succeed.
He highlighted areas such as export growth, which the report found was weak, was one area where businesses could get ahead of competitors if they were willing to take measured risks.
The report also showed that profits were being affected by late payments and spare capacity, as well as a rise in input prices and total salaries, which were outpacing selling prices.
“I suspect that things may get worse in the coming months before they get better when it comes to profitability. A sudden departure from the EU in the event of a no-deal may push up the cost of raw materials from the continent and complicate some customer and supplier relationships,” added Graham. “That is why businesses should be looking at ways of making their business more profitable now and should be reaching out to suppliers and customers to put arrangements in place to ensure business continuity.”
The ICAEW research also showed that capital investment among UK businesses was still very week, with few investing funds into new projects, services or products.
Lamont Pridmore said that this may be a slightly short-sighted approach to take considering the allowances and tax relief on offer to those who invest in their own business.
