Business confidence in the East Midlands is at a low point thanks to weak profits growth, fears of a global slowdown and Brexit concerns.
A new survey from the Institute of Chartered Accountants in England and Wales (ICAEW) suggests businesses are worrying about the future, made worse by Brexit negotiations coming to a halt while the Tories pick a new leader.
The survey, covering the last three months, asked 1,000 chartered accountants across the 海角视频 how they felt about the economic prospects of the businesses they work with.
It concluded that slowing global trade was likely to be adversely impacting the East Midland’s relatively large manufacturing sector, while the ongoing uncertainty surrounding Brexit was probably “dampening sentiment”.
But while confidence across the region was negative, it was slightly better than the 海角视频 as a whole.
It follows a IHS Markit/CIPS 海角视频 report suggesting Britain’s manufacturing sector plunged into decline for the first time in almost three years in May as a result of stockpiling driven by no-deal Brexit preparations.
That suggested that large inventories prior to the original March Brexit deadline meant that “manufacturers reported increased difficulties in convincing clients to commit to new contracts during May”.
And a recent survey by Make 海角视频, The Manufacturers’ Organisation and business advisory firm BDO LLP, showed Brexit uncertainty was dragging on, but things had been temporarily boosted by artificial stockpiling which reached record levels.
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The ICAEW said: “Businesses in the region, particularly manufacturers, still look to be taking precautionary Brexit measures such as stockpiling, with the proportion of companies reporting above normal stock levels higher than the national average.”
Dr Sophie Dale-Black, ICAEW East Midlands director, said: “Businesses in the East Midlands say that they don’t feel that things will change much in the next few months and this is reflected in their low confidence.
“Companies in the region are facing lots of challenges, with manufacturers especially facing problems.
“Business owners have told us that they need clarity and want politicians to start making decisions to help them plan their operations for what is at the moment an uncertain future.”
The survey also suggested profit growth in the East Midlands was the weakest rate across all of the 海角视频.
It said: “With sluggish market conditions apparent, a fifth of businesses in the East Midlands now report late payments as a growing issue.
“Moreover, regulatory requirements remain the most widely reported growing concern in the East Midlands.”
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However the survey showed businesses expect faster domestic sales and profits growth in the months to come, and improved exports.
Investment, though, was expected to be moderate.
East Midlands business news
Market Harborough-based country clothes retailer Joules recently told BusinessLive it will start planning for a potential October 31 no-deal Brexit in the coming months, by stockpiling several million pounds of stock in the event of hold-ups in the supply chain.
The business made similar plans for the March 31 deadline.
And medicines supplier Morningside Pharmaceuticals is among firms holding back on expansion plans in case of a no-deal Brexit.
Chief executive Dr Nik Kotecha OBE said he was waiting to see what happens next before making what would be a “significant investment” in the business.
Dr Kotecha said his business has already set up a small satellite office in Malta as a contingency in case of a no-deal – and said other pharmaceutical companies were considering moving operations into mainland Europe.