News
Frances Ball 13 May 2019 12:16pm

UK business output and confidence fall

BDO’s Output Index has fallen for the first time this year while business confidence plummets

The index, measuring the growth of UK business output, fell to 98.63 in April from 98.74 in March.

BDO also noted a decline in business confidence, which in April slipped to the lowest level the index has registered since 2012.

The firm’s Manufacturing Output Index also showed a decline in April, to 97.27, a year-on-year decrease of 8.32 points.

Confidence within the manufacturing sector is similarly slipping and sits at the lowest point since November 2016.

Activity in manufacturing is expected to decline as it sees a tail-off in stockpiling, which reached unprecedented levels before the eventual extension of the Brexit deadline.

Services show the same pattern of decline. Optimism in the services sector has fallen for nine consecutive months, and at 95.06 is 0.06 points away from negative territory, BDO reports.

Across all sectors, the underlying issue is the continued lack of progress over Brexit. The Westminster impasse means that despite the extension of Article 50, businesses still have no clarity on the future relationship between the UK and the EU.

BDO partner Peter Hemington highlighted the impact that political confusion is having on businesses across the UK.

“The only certainty businesses have at the moment is that the UK government still doesn’t know exactly how or when the UK will leave the European Union,” he said, pointing to the impact this confusion was having on business confidence.

“An extension of Article 50 alone is insufficient to restore sentiment among businesses,” he added. “In the coming months, the government should look at further policy interventions, such as increasing the Annual Investment Allowance, to help businesses invest and stimulate the UK economy.”

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