PwC survey confirms business confidence low
Business confidence in Northern Ireland remains ‘poor’, according to a new survey by business advisors PricewaterhouseCoopers.
The inaugural issue of the firm’s Regional Trends Survey reviewed business confidence in the seven PwC UK regions.
The report found that the lack of available credit and lacklustre business confidence are a major constraints to recovery.
And while there was a significant improvement in business confidence in the second half of 2009, all regions except Northern Ireland reported only ‘average’ confidence levels.
PwC managing partner in Northern Ireland, Hugh Crossey said: “This reflects the region’s steepest decline in house prices of all the UK regions, coupled with a large rise in unemployment and fears for political stability.
“There is concern in the business community about political events in Northern Ireland and particularly that the Executive is not focused on the economy and the hard choices necessary to drive recovery.”
The Regional Trends Survey records the prevailing sentiment among the wider business community. It also provides an outline of UK business health, prospects and concerns.
One key finding was that political instability remains a key concern in some regions.
It also showed lacklustre business confidence is further inhibiting investment; there is a lack of bank lending and perceived onerous borrowing conditions; construction and engineering are the hardest hit sectors across all regions; and tax rises are stifling entrepreneurship.
The North, Northern Ireland, South East and Scottish regions said uncertainty regarding future taxes and post-election spending, is leading businesses to err on the side of caution when considering investment decisions. These regions and the Midlands report significant scepticism about reported increases in bank lending.
The Midlands, Northern Ireland and the North have all seen declines in house building activity, though house prices have shown some signs of recovery. Given that consumer credit markets are still feeling the squeeze, full recovery is some way off.
Hugh Crossey said housebuilding is at a virtual standstill: “In the private sector many large construction projects have been mothballed due to financial constraints and as major public works contracts conclude, lack of public sector liquidity may see more projects frozen, further driving up unemployment.
“Whether public sector spending continues to take up the slack in the industry after the upcoming general election remains uncertain. There is no doubt that the general sentiment amongst PwC’s UK business clients is one of lacklustre confidence.”