Business confidence in 2024

Published by Andrew Griggs on 30 January 2024

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The ICAEW has published the latest Business Confidence Monitor (BCM) for Q4 2023.

The report indicates a slight uptick in business confidence in the UK. However, it still lags behind pre-pandemic levels due to overarching economic apprehensions. Business sentiment is constrained by elevated interest rates and challenges related to customer demand.

We’ve summarised key points from the report below along with analysis from our experts:

  • Economic growth has been very slow, but inflation has eased considerably during Q4 2023.
  • Business sentiment has remained below its historic average and has not improved in recent quarters. However, weekly data shows confidence improving after a fragile start.
  • Selling price inflation and profits growth have fallen, while input cost rises have slowed and salary growth appears to have peaked. Companies anticipate further moderation in the year ahead, while employment growth is set to remain at current rates.
  • Domestic and export sales growth have softened due to weaker demand, but companies forecast an uptick. All sectors have been affected by the underlying weakness of the economy and various uncertainties and challenges.
  • Customer demand and regulatory requirements are the two most widespread growing challenges facing businesses. Finance-related issues, including the tax burden, bank charges, late payments, and access to capital, remain pressing concerns.
  • Privately owned companies forecast slightly stronger growth than listed companies, and some manufacturing-intensive regions are the most confident.
  • The Autumn Statement included measures to support businesses and households. Prospects for growth in the UK and globally are expected to be weak in 2024, particularly in the first half of the year, with several risks to the outlook.

If you’re looking for more economic business insights for 2024, contact an expert here.

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