The Business Confidence Monitor (BCM) for Q1 2020 has revealed a huge increase in business confidence.
Undertaken by the chartered accountancy body ICAEW, the BCM for Q1 2020 has undergone a dramatic swing from the final quarter of 2019, when the confidence measure was -20.6 – its lowest result in 10 years.
From there, the BCM for Q1 2020 stands at 1.3; this is significant for more than one reason. Firstly, it is clearly a marked improvement on the previous quarter; secondly, it is the largest quarterly movement in confidence since the end of the last recession in 2009.
Thirdly, it is the first positive reading delivered by the survey since the second quarter of 2018.
It’s not hard to link this upturn to the decisive result in the General Election, which delivered an 80-seat majority and as such, gave the government the chance to pass through the Withdrawal Act, which led to the exit from the European Union at the end of January – though the transition period still remains.
Elsewhere, promises to end austerity while also increasing investment in infrastructure and the regions are cited as reasons for such a swing in confidence.
However, Michael Izza, Chief Executive at ICAEW, believes that businesses need to be given clarity to assist with what is an challenging economic position.
He said: “Businesses are feeling more confident about the future now the political deadlock has ended. But while some uncertainties have eased, much remains unknown around future trade agreements and regulatory alignment.
“It’s essential that businesses are supported through the transition period, and we want to see the government negotiate a free trade agreement that maximises market access for goods and services, and avoids unnecessary bureaucracy for business.
“Creating the right environment for British businesses to prosper long-term means boosting skills, fixing late payments and improving access to capital.
“The new majority government has indicated it will use the Budget to boost investment and level up regional inequalities.
“We hope this includes pro-business measures such as tax grants and plans to increase productivity, so we can look beyond Brexit to critical domestic issues.”