According to accountants Grant Thornton, business confidence is now at its lowest level since late 2009, leading to the expectation that 2012 will see a return to falling economic output.
The economy faces a ‘poison cocktail’ of weak domestic demand, stagnating exports and capital investment plans being revised downwards. In addition, 60 per cent of businesses are operating below capacity.
With confidence down across the board, only the West Midlands and Yorkshire/Humberside show significantly less loss in confidence than the national average, and retail, property and service sectors are particularly gloomy.
Although privately-owned companies are generally less pessimistic than companies, the results add up to the biggest single quarterly drop in business confidence ever recorded.
The only positive note is the expectation that inflation will fall.
If you are concerned about the effect of tough economic times on your business, contact us for advice on legal aspects and for help with your planning and negotiations.