Fuente: www.consultant-news.com Fecha: 20.04.2010
PwC: Improving credit conditions and business confidence but uncertainty remains about longer term outlook
While the prevailing view from UK businesses is that the economy is beginning to show signs of growth, underlying this is a cautiousness about the fragile nature of the recovery.
The second issue of the PwC’s Regional Trends Report collates the results of a poll of PwC’s regional business leaders on the current prevailing sentiment among the wider business community in their regions. It also provides an overview of UK business health, prospects and concerns. Key report findings include: uncertainty growing over the outcome of the general election; an improving business confidence and cautious optimism returning; signs of a loosening of the credit environment; a reliance on public expenditure as a key growth driver; and a housing market on the rise but below 2007 peak.
Kevin Nicholson, head of regions, PwC said: “While the overall picture for the UK is varied, there appears to be a muted view of the recovery as the pending general election has created a wait and see climate. It is clear that public spending on infrastructure improvements has been significant in some areas as a means of bolstering the business environment. The South East’s £800m redevelopment of Reading station and ongoing transformation of M4 junction 11, combined with work on New Street station and a runway extension at Birmingham airport in the Midlands and continuing work on London’s Crossrail and 2012 Olympics projects, represent some of the major initiatives which are either in progress or planned for the near future.
Business confidence gradually improving
All but two regions report ‘average’ business confidence this quarter, the exceptions being Northern Ireland where confidence is lower and London being higher. This further supports the conclusion drawn in the previous edition of our Regional Trends Report that the bottom of the recession may have been reached. In London, improving economic indicators in recent months have boosted confidence however; the picture across the UK is a mixed one.
High levels of uncertainty highlighted since the last quarter have yet to be resolved, and if anything have worsened over the first three months of 2010 as the general election draws nearer.
Credit availability remains restricted, initial signs of loosening?
The regions were unanimous in citing a lack of available credit as one of the key challenges faced by businesses over the past quarter, up from six of seven regions in the previous review. The South East and Scotland both report a noticeable loosening of access to capital, albeit at a price.
Public expenditure key growth driver
Five of our eight regions cite the public sector as having been a key sector driving growth in the last three months. However, Northern Ireland, the Midlands, the South West, the North and Scotland all express concern at continued uncertainty over the future of public spending in light of the upcoming general election.
Nicholson says: “Public spending cuts are seen as very likely but the details are not yet clear, and there are fears over the potential to hinder the recovery before it becomes self sustaining. Northern Ireland, particularly, has been heavily reliant on the buoyancy of the public sector during the recession, with most other sectors stagnating or falling into decline. The South East is concerned that the burden of the bail out to the financial sector is yet to be fully felt; there is a risk that reducing spending at this stage will have significant consequences beyond the direct impact of the fiscal stimulus.”
Unemployment and housing
The last 3 months of 2009 saw a slight fall in UK average unemployment by 0.3 percentage points to 7.5%, helped particularly by a sharp drop in Northern Ireland, although indications for the first few months of 2010 are that this trend has reversed since then. London’s unemployment rate remains the highest of our reporting regions at 9.1%, though rates in the North East and the West Midlands (included within the North and Midlands regions) are higher still. Unemployment in Scotland also rose, though the anticipated growth in the housing sector may help to offset this in the near term, augmented by increasing investment in renewable energy; something which could become a regional speciality in years to come.
Average house prices across the UK rose marginally in the three months to December 2009, reflecting a general trend common to all regions with the exception of Northern Ireland, whose apparent recovery in the third quarter of 2009 was short lived.