UK economy receives mixed report
Two reports out today present conflicting predictions for the outlook of the UK economy.
Research by the Confederation of Business Industry (CBI) highlighted falling business confidence in the UK, though other research indicates that employers are creating more than 400,000 new jobs across the UK.
The CBI survey of business confidence has found that firms are less confident about the future than three months ago in all but two regions. The most notable decline is in Wales, which accounted for a third of all new UK jobs in the last year.
Northern Ireland and London and the South East were the two survey regions that saw an increase in confidence, but the overall result indicates that hopes for a sharp economic recovery after the war in Iraq have faded.
This will add to economic concerns raised last week by research, which revealed that individual bankruptcies had increased to the highest level for a decade.
But despite firms becoming increasingly concerned about the future, some economic information indicated an upturn. Manufacturing has grown for the first time in several months, and two other reports indicate that the economy is doing well.
BDO Stoy Heyward has released good predictions for the end of the year, which suggests growth expectations are returning to the same level as last year. The BDO figures are based on its compilation of all the major surveys, which are weighted in accordance with past accuracy.
Even more positive is a research paper that suggests the UK is creating more than 400,000 new jobs through expansion projects and other initiatives underway or in the pipeline.
The research, conducted by Mandis Information Services, is based on projects and initiatives that employers were working on in the first six months of the year. 1,700 large or medium sized firms had plans that would amount to a total of 436,000
Retail and wholesale activities accounted for around a fifth of the new jobs, and the public sector nearly a tenth. But though firms were active in the first six months, the drop in confidence may mean the economy struggles to match the overall increase in employment of 254,000 over the twelve months to June.
Mixed news may cheer the Government to some extent as the UK is battered by ongoing weakness in Europe, and by difficulties in the USA, which today announced that the number of people in work fell in July by 44,000.
