- Just 9% of UK accountants rate business confidence as ‘good’ or ‘very good’
- Europeans nearly four times more confident than UK
Business confidence in the UK is significantly below the European average, with only the Spanish more pessimistic about their economic prospects among major European economies, according to research by RSM, the sixth largest global audit, tax and advisory network by fee income.
Just 9% of UK accountants surveyed by RSM ranked business confidence in the UK as either ‘good’ or ‘very good’, whereas 36% of accountants overall in Europe categorised business confidence in their respective countries as ‘good’ or ‘very good’. Spanish accountants are the most pessimistic among the five major European economies, with none rating business confidence as ‘good’ or ‘very good’.
Surprisingly, both Africa and the Middle East scored lower than Europe on business confidence, despite many countries in those regions experiencing relatively high levels of economic growth. Just 25% and 22% of accountants respectively in those regions rated business confidence as ‘good’ or ‘very good’.
The research was conducted among over 280 accountants from over 70 countries around the world at the RSM annual conference. Delegates were asked a series of questions on issues such as business confidence and bank lending.
Jean Stephens, Chief Executive Officer of RSM, comments: “Growth prospects in the UK are arguably more favourable than in the Eurozone but, with the Eurozone being the UK’s largest trading partner, it is difficult for the UK economy to grow while the debt crisis remains unresolved.”
“Business confidence is absolutely critical. If businesses do not feel optimistic, they will be very reluctant to invest. Increased capital spending by private businesses will be needed to kick-start growth, but many businesses across Europe are still in cost-cutting mode.”
Stephens adds: “Many African economies are growing strongly, but with demand from Europe and China muted, and commodity prices falling, many African economies are facing growing headwinds.”
Looking forward to 2013, Europe as a whole is far more pessimistic than the UK. 42% of European accountants think business confidence in Europe will decline over the next 12 months, compared to 27% in the UK.
Only African accountants are less optimistic about business confidence improving over the next 12 months: just 25% thought confidence would improve, compared to 36% of Europeans.
Stephens comments: “The UK has emerged from a double dip recession just as the single currency area has started to contract, and there is every possibility that the Eurozone recession will deepen before we see any improvement. Many of the forecasts for 2013 are saying that, among the big five European economies, the UK will perform the strongest, and accountants would seem to agree.”