News emerging this week reveals that confidence from UK businesses is at a 21-year low.
According to a survey conducted by accountancy firm, BDO, optimism in business performance last month was the lowest it has been for more than 21 years.
The BDO Optimism Index, which predicts business performance six months in advance, fell from 90.3% in December 2012 to 88.9% for January 2013 – considerably lower than the score of 95% to indicate growth.
BDO suggests that it is unlikely the UK economy will grow in the first quarter of 2013, further increasing the risk of a triple-dip recession.
The news comes after Volvo Trucks announced that it intends to reduce production output after a fall in year-on-year vehicle registrations; deliveries in Europe decreased by 13%, while those in North America fell by 24% between November 2011 and November 2012. The total number of delivered units globally was down 17%.
It isn’t all doom and gloom, however. The BDO Employment Index figure has grown from 92.8% in January 2012 to 95.1% for this year, suggesting that employment is likely to increase during the next two quarters. This is also the first time the figure has risen above 95% since April 2012.
Output Index figures within the manufacturing sector have also increased, rising from 91.2% in January 2012 to 92.3% for last month. The SMMT said: “On the back of an unprecedented level of global investment committed to the UK automotive industry (more than £6bn in the last two years), we anticipate the creation of more than 20,000 new jobs and year-on-year rises in total manufacturing output.
“Also, 2012 saw the first automotive trade surplus since the mid-1970s demonstrating the world-wide appeal of UK-built vehicles and, to a certain extent, our insulation from economic instability in the eurozone.”