THE latest economic surveys from the Chartered Institute of Procurement & Supply should be viewed by the UK Government as flashing warning lights although, on recent form, they will probably go unheeded by the Tories.
As the clock ticks towards the Brexit date of March 29 next year, and fears of a no-deal scenario remain elevated, we should not be surprised activity and optimism in the UK private sector economy is being affected. The latest surveys of the services, manufacturing and construction sectors point to a quarterly UK growth rate of just 0.2 per cent. Even by the UK’s recent poor standards, that is grim.
Optimism among UK services companies, about the prospects for increased business activity on a 12-month view, has deteriorated to its weakest since July 2016, the month after the Brexit vote.
CIPS has highlighted the significant degree to which Brexit uncertainty is weighing on activity and optimism.
And CIPS director Duncan Brock flagged services companies’ concerns “over the weakness in the UK and global economies which affected client confidence and consumer spending”.
Mulling services companies’ view of the future, CIPS said: “While some firms reported improved optimism on the basis that business investment and client confidence would likely pick up in response to clarity about Brexit outcomes, many others saw a deepening malaise due to Brexit-related disruptions and wider concerns about the general economic outlook.”
Mr Brock, who also flagged “thin” availability of staff for services companies and a squeeze on profit margins, warned: “Clarity around Brexit may turn this around but time is running out and this downward slide should be a wake-up call that progress must be made now.”
As the clock ticks, the patience of many companies, from small domestic firms to big overseas groups with major UK manufacturing operations, will be wearing very thin indeed. All the while, Brexit drags down the UK economy. And this is even before we get to the actual exit and all the problems that will cause – deal or no-deal.
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