Confidence falls in South’s economy

10:58am Tuesday 2nd December 2008

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BUSINESS confidence in the south east has plummeted ten points to -30, business leaders will be told today.

The latest quarterly survey by the Institute of Chartered Accountants confirms Hampshire firms think economic prospects for next year are getting worse.

Senior business leaders plan little growth in their main cost areas in the coming 12 months and employee numbers are expected to remain almost static.

Weakening customer demand will be a major challenge with profit and turnover growth set to fall.

The results of the UK Business Confidence Monitor (BCM) will be announced to business leaders at an economic briefing at the Hampshire Rose Bowl. The survey rates confidence on a scale of between plus and minus 100.

Fay Webster, pictured, the south east regional director for the ICA, said confidence in the region has dropped in line with the national trend.

She said: “This quarter’s BCM confirms what many people are already thinking – the impact of the global liquidity crisis is now directly affecting the economy in the south east.

But she added: “In response, businesses within the region are taking the right steps to control their costs and manage their way through the downturn.”

However the survey was completed before the Chancellor unveiled shocking public borrowing figures in his pre-budget report due to declining revenues and a shrinking economy.

He slashed growth forecasts for next year from 2.75 per cent to -1.25 per cent.

A leading manufacturing organisation yesterday warned of the worst decline in 20 years.

EEF said manufacturing in the south east would shrink by five per cent next year and engineering by 6.3 per cent.

Region director David Seall said: “What marks this downturn out from others is the alarming rate at which conditions have deteriorated through the autumn due to the problems in the financial markets.

“It is now imperative that government and the Bank of England continue to pull on every lever at their disposal.”