Threat of global shocks sparks confidence downturn in the east
Anti-austerity protesters hold Greek flags. (AP Photo/Emilio Morenatti) - Credit: AP
East Anglian businesses have suffered a confidence knock-back triggered by the uncertainty sweeping through international markets, a report has found.
Marilyn Martin. Picture submitted - Credit: Archant
The chaos in Greece coupled with a stock market slowdown in China has driven BDO's optimism index to its lowest levels since November last year.
The lower reading of 103.9 reflects concerns that instability on the global stage will hit trade closer to home, according accountancy and business advisors BDO.
And these fears have also dealt a blow to recruitment forecasts, with BDO's employment index recording its sharpest percentage decrease since November 2011 – an outcome which may see companies scaling back their recruitment plans in the future.
However, yesterday's announcement that Eurozone lenders had agreed a new bailout deal with Greece could rekindle confidence for those firms trading directly with Europe.
Marilyn Martin, partner at BDO – which has offices at Yare House, Thorpe Road, Norwich – said: 'We thrive by being an outward looking economy, so to see the dynamo that is the Chinese market slowing down is clearly playing on the minds of exporters.
'Our exports market is a key strength of the economy. We need to do all we can to maximise its potential in growing and re-balancing our economy as a whole.'
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She added: 'The chancellor missed an opportunity to help exporters, and specifically those manufacturers that drive foreign trade, in last week's budget.
'The government must cut the tax barriers that exporters face as a priority. Introducing a VAT zero rating for suppliers to companies that export would be a good starting point.'
Alongside the unpredictable global picture, business confidence was also hit by pressures on manufacturers, with BDO's optimism index falling to 98.5, from 103.4, this month.
The findings provide further evidence that the government has made little progress rebalancing the economy away from the dominant services sector, BDO said.
It came as the output hopes of businesses mirrored the falling confidence levels, as the BDO's output index dipped for the first time this year, down to 104.1.
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