Q4 2013 ICAEW / Grant Thornton Business
Confidence Monitor results
28 October 2013
Contact: Caroline Florence

BUSINESS WI...
Outline
• Confidence index top lines
• Financial performance indicators
– Growth indicators

– Inflation & labour market i...
Business confidence continues to climb
ICAEW / Grant Thornton Business Confidence Index
40
30

31.7
25.8
24.6 25.5
21.5

2...
Confidence has now been rising for five consecutive
quarters
Quarterly change to Confidence Index
35
30
25
20
15
10
5
0
-5...
Confidence has been increasing since August
42

UK BCM CI TREND - 3 WEEK ROLLED

40

(Each point based on c.230)

38
36
34...
Economic growth expected to accelerate again in Q4 2013 –
expanding by 1.3%
Quarter on quarter real GDP growth, per cent
1...
Outline
• Confidence index top lines
• Financial performance indicators
– Growth indicators

– Inflation & labour market i...
Reported turnover growth and expectations pick up
Turnover, annual percentage change
8

6

4

2

0

… over last 12 months
...
Reported profit growth has also increased this quarter
Gross profits, annual percentage change
8

6

4

2

0

… over last ...
Expected domestic sales growth has increased for five
consecutive quarters
Domestic sales, annual percentage change
8

6

...
Next year should see a relatively favourable environment
for UK exporters
Annual real GDP growth. Cebr forecasts for 2013 ...
Reported export growth has increased for two consecutive
quarters
Exports, annual percentage change
8
6
4
2
0

… over last...
Signs starting to emerge that businesses are becoming
more willing to invest
Capital investment, annual percentage change
...
Sharp fall in the share of businesses reporting customer
demand to be a greater challenge
Share of businesses reporting cu...
Decline in net share of businesses with stocks above
normal levels
Net share* of businesses** with stock levels above norm...
Still signs of spare capacity in the economy
Share of businesses operating at and below capacity

65%
60%
55%
50%
45%
40%
...
Outline
• Confidence index top lines
• Financial performance indicators

– Growth indicators
– Inflation & labour market i...
Uptick in selling price increases but growth remains below
pre-crisis norms
Selling prices, annual % change
2.5
2
1.5
1
0....
Input price inflation continues to hold steady
Input prices, annual % change
5
4
3
2
1

… over last 12 months
BUSINESS WIT...
Employment growth rising and expected to pick up further
Employment, annual percentage change

3
2
1
0
-1

… over last 12 ...
FTSE 350 companies expected to stop shedding jobs
Employment, annual percentage change

3
FTSE 350 Listed

Large Private C...
Staff turnover and skill availability becoming more of an
issue as the economy recovers
Net percentage balance of firms re...
Salary growth remains weak and below consumer price
inflation
Average total salary, annual percentage change
6
5
4
3
2
1
0...
Outline
• Confidence index top lines
• Financial performance indicators
– Growth indicators

– Inflation & labour market i...
Trend of Business Confidence by Region
UK AVERAGE

London

45
40
35
30
25
20
15
10
5
0
-5

South East (excl
London)

Q4 20...
Trend of Business Confidence by Sector
ALL
PRODUCTION

UK

45
40
35
30
25
20
15
10
5
0
-5

Q4 2012
ALL
SERVICES

Retail
& ...
A broad-based recovery
ICAEW / Grant Thornton Business Confidence Index – construction sector
60

All Production industrie...
Confidence of retail & wholesale firms now
keeping pace with business services
40

Retail & Wholesale

Business services

...
Services sector output is now past its pre-crisis
peak
ONS index of economic output, by sector, 2007 = 100
105

100

95

9...
Profit growth – last 12 months
ALL
PRODUCTION

UK

Energy, Water &
Mining

Manufacturing
& Engineering

CONSTRUCTION

6
5
...
Profit growth – next 12 months
ALL
PRODUCTION

UK

8
7
6
5
4
3
2
1
0
-1
-2

Q4 2012
ALL
SERVICES

Retail
& Wholesale

Q1 2...
Capital investment growth – last 12 months
ALL
PRODUCTION

UK

Energy, Water &
Mining

Manufacturing
& Engineering

CONSTR...
Capital investment growth – next 12 months
ALL
PRODUCTION

UK

Energy, Water &
Mining

Manufacturing
& Engineering

CONSTR...
Export growth – last 12 months
ALL
PRODUCTION

UK

9
8
7
6
5
4
3
2
1
0
-1
-2

Q4 2012
ALL
SERVICES

Retail
& Wholesale

Q1...
Export growth – next 12 months
ALL
PRODUCTION

UK

7
6
5
4
3
2
1
0
-1
-2

Q4 2012
ALL
SERVICES

Retail
& Wholesale

Q1 201...
Employee growth – last 12 months
-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Banking, Finance & Insurance
I...
Employee growth – next 12 months
-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Banking, Finance & Insurance
Transport & Storag...
Trend of Business Confidence by Company
Type

UK Confidence
Index

ALL UK LISTED

FTSE 350

ALL PRIVATE
COMPANIES

Private...
Conclusions
• Business confidence continued to rise in Q4 2013, suggesting that the
economic recovery is gaining further m...
A world leader of the
accountancy and finance profession

BUSINESS WITH CONFIDENCE

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ICAEW/Grant Thornton Business Confidence Monitor Q4 2013

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Quarterly overview of the Business confidence monitor produced by the ICAEW in association with Grant Thornton UK LLP.

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ICAEW/Grant Thornton Business Confidence Monitor Q4 2013

  1. 1. Q4 2013 ICAEW / Grant Thornton Business Confidence Monitor results 28 October 2013 Contact: Caroline Florence BUSINESS WITH CONFIDENCE icaew.com
  2. 2. Outline • Confidence index top lines • Financial performance indicators – Growth indicators – Inflation & labour market indicators • Regional & sector stories BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Source: ICAEW / Grant Thornton Q4 2011 Business Confidence Monitor
  3. 3. Business confidence continues to climb ICAEW / Grant Thornton Business Confidence Index 40 30 31.7 25.8 24.6 25.5 21.5 21.9 20 8.1 9.4 6.4 10 5 5.5 1.4 0 8.8 13.7 11.9 9.6 8.1 11.5 6.4 4.8 2.1 24 4.8 16.7 12.8 12 1.1 -1.3 -5.4 -3.9 -7.2 4.2 -9.7-9.3 -10 -19.7 -20 -25.7 -30 -28.2 -36.3 -40 -45.3 UK Average -50 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 Q4 2006 Q2 2006 Q4 2005 Q2 2005 Q4 2004 Q2 2004 -60 icaew.com Slide number 3 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  4. 4. Confidence has now been rising for five consecutive quarters Quarterly change to Confidence Index 35 30 25 20 15 10 5 0 -5 -10 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 Q4 2006 Q2 2006 Q4 2005 Q2 2005 -20 Q4 2004 -15 icaew.com Slide number 4 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  5. 5. Confidence has been increasing since August 42 UK BCM CI TREND - 3 WEEK ROLLED 40 (Each point based on c.230) 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 Where the line passes thru 4 vertical grid boxes the change is significant. 8 6 4 2 0 THREE WEEKS BEGINNING …….. BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 5 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  6. 6. Economic growth expected to accelerate again in Q4 2013 – expanding by 1.3% Quarter on quarter real GDP growth, per cent 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% QQ growth actual QQ growth estimate -2.0% -2.5% BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007 Q3 2007 Q2 2007 Q1 2007 Q4 2006 -3.0% icaew.com Slide number 6 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  7. 7. Outline • Confidence index top lines • Financial performance indicators – Growth indicators – Inflation & labour market indicators • Regional & sector stories BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Source: ICAEW / Grant Thornton Q4 2011 Business Confidence Monitor
  8. 8. Reported turnover growth and expectations pick up Turnover, annual percentage change 8 6 4 2 0 … over last 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 -4 Q4 2006 -2 … expected next 12 months icaew.com Slide number 8 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  9. 9. Reported profit growth has also increased this quarter Gross profits, annual percentage change 8 6 4 2 0 … over last 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 -4 Q4 2006 -2 … expected next 12 months icaew.com Slide number 9 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  10. 10. Expected domestic sales growth has increased for five consecutive quarters Domestic sales, annual percentage change 8 6 4 2 0 … over last 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 -4 Q4 2007 -2 … expected next 12 months icaew.com Slide number 10 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  11. 11. Next year should see a relatively favourable environment for UK exporters Annual real GDP growth. Cebr forecasts for 2013 and 2014 15 13 11 9 7 5 3 1 -1 Copyright © ICAEW 2013. All rights reserved. 2014f 2013f 2012 Eurozone 2011 2010 2009 US BUSINESS WITH CONFIDENCE 2008 2007 2006 2005 -5 2004 -3 China icaew.com Slide number 11 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  12. 12. Reported export growth has increased for two consecutive quarters Exports, annual percentage change 8 6 4 2 0 … over last 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 -4 Q4 2006 -2 … expected next 12 months icaew.com Slide number 12 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  13. 13. Signs starting to emerge that businesses are becoming more willing to invest Capital investment, annual percentage change 4 3 2 1 0 -1 -2 … over last 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 -4 Q4 2006 -3 … expected next 12 months icaew.com Slide number 13 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  14. 14. Sharp fall in the share of businesses reporting customer demand to be a greater challenge Share of businesses reporting customer demand as greater challenge 60% 50% 40% 30% 20% BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 0% Q4 2007 10% icaew.com Slide number 14 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  15. 15. Decline in net share of businesses with stocks above normal levels Net share* of businesses** with stock levels above normal 20% 15% 10% 5% 0% -5% -10% Raw materials Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 -20% Q4 2007 -15% Finished goods *Share of businesses with stock levels above normal minus ** Manufacturing, Construction, share of businesses with stock levels below normal BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Transport & Storage icaew.com Slide number 15 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  16. 16. Still signs of spare capacity in the economy Share of businesses operating at and below capacity 65% 60% 55% 50% 45% 40% Below capacity BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 30% Q4 2007 35% At capacity icaew.com Slide number 16 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  17. 17. Outline • Confidence index top lines • Financial performance indicators – Growth indicators – Inflation & labour market indicators • Regional & sector stories BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 17 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  18. 18. Uptick in selling price increases but growth remains below pre-crisis norms Selling prices, annual % change 2.5 2 1.5 1 0.5 0 … over last 12 months Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 … expected next 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 -1 Q4 2006 -0.5 icaew.com Slide number 18 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  19. 19. Input price inflation continues to hold steady Input prices, annual % change 5 4 3 2 1 … over last 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 -1 Q4 2006 0 … expected next 12 months icaew.com Slide number 19 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  20. 20. Employment growth rising and expected to pick up further Employment, annual percentage change 3 2 1 0 -1 … over last 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 -3 Q4 2006 -2 … expected next 12 months icaew.com Slide number 20 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  21. 21. FTSE 350 companies expected to stop shedding jobs Employment, annual percentage change 3 FTSE 350 Listed Large Private Companies SME Private Companies 2 1 0 -1 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Expected 12 months from Q4 2013 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 -3 Q4 2010 -2 icaew.com Slide number 21 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  22. 22. Staff turnover and skill availability becoming more of an issue as the economy recovers Net percentage balance of firms reporting factors to be a greater challenge to business performance 25% 20% 15% 10% 5% 0% -5% Availability of management skills BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Availability of non-management skills Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 -15% Q4 2007 -10% Staff turnover icaew.com Slide number 22 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  23. 23. Salary growth remains weak and below consumer price inflation Average total salary, annual percentage change 6 5 4 3 2 1 0 … over last 12 months Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 … expected next 12 months BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 -2 Q4 2006 -1 Consumer price index (CPI) inflation icaew.com Slide number 23 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  24. 24. Outline • Confidence index top lines • Financial performance indicators – Growth indicators – Inflation & labour market indicators • Regional & sector stories BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 24 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  25. 25. Trend of Business Confidence by Region UK AVERAGE London 45 40 35 30 25 20 15 10 5 0 -5 South East (excl London) Q4 2012 UK AVERAGE North West Q1 2013 Northern England South West Q2 2013 East of England Q3 2013 Yorks & Humber East Midlands West Midlands Q4 2013 England Scotland Wales 45 40 35 30 25 20 15 10 5 0 -5 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 25 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  26. 26. Trend of Business Confidence by Sector ALL PRODUCTION UK 45 40 35 30 25 20 15 10 5 0 -5 Q4 2012 ALL SERVICES Retail & Wholesale Q1 2013 Transport & Storage Energy, Water & Mining Q2 2013 Banking, Finance & Insurance Manufacturing & Engineering Q3 2013 Property CONSTRUCTION Q4 2013 Business Services IT & Communications 45 40 35 30 25 20 15 10 5 0 -5 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 26 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  27. 27. A broad-based recovery ICAEW / Grant Thornton Business Confidence Index – construction sector 60 All Production industries Construction All Service industries 40 20 0 -20 -40 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 Q2 2007 Q4 2006 -60 icaew.com Slide number 27 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  28. 28. Confidence of retail & wholesale firms now keeping pace with business services 40 Retail & Wholesale Business services 30 20 10 0 -10 -20 -30 -40 -50 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q4 2013 Q2 2013 Q4 2012 Q2 2012 Q4 2011 Q2 2011 Q4 2010 Q2 2010 Q4 2009 Q2 2009 Q4 2008 Q2 2008 Q4 2007 -60 icaew.com Slide number 28 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  29. 29. Services sector output is now past its pre-crisis peak ONS index of economic output, by sector, 2007 = 100 105 100 95 90 85 Production industries Construction Services BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. 2013 Q3 2013 Q1 2012 Q3 2012 Q1 2011 Q3 2011 Q1 2010 Q3 2010 Q1 2009 Q3 2009 Q1 2008 Q3 2008 Q1 2007 Q3 2007 Q1 2006 Q3 80 icaew.com Slide number 29 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  30. 30. Profit growth – last 12 months ALL PRODUCTION UK Energy, Water & Mining Manufacturing & Engineering CONSTRUCTION 6 5 4 3 2 1 0 -1 Q4 2012 -2 ALL SERVICES Retail & Wholesale Q1 2013 Transport & Storage Q2 2013 Banking, Finance & Insurance Q3 2013 Property Q4 2013 Business Services IT & Communications 6 5 4 3 2 1 0 -1 -2 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 30 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  31. 31. Profit growth – next 12 months ALL PRODUCTION UK 8 7 6 5 4 3 2 1 0 -1 -2 Q4 2012 ALL SERVICES Retail & Wholesale Q1 2013 Transport & Storage Energy, Water & Mining Q2 2013 Banking, Finance & Insurance Manufacturing & Engineering Q3 2013 Property CONSTRUCTION Q4 2013 Business Services IT & Communications 8 7 6 5 4 3 2 1 0 -1 -2 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 31 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  32. 32. Capital investment growth – last 12 months ALL PRODUCTION UK Energy, Water & Mining Manufacturing & Engineering CONSTRUCTION 6 5 4 3 2 1 0 -1 Q4 2012 -2 ALL SERVICES Retail & Wholesale Q1 2013 Transport & Storage Q2 2013 Banking, Finance & Insurance Q3 2013 Property Q4 2013 Business Services IT & Communications 6 5 4 3 2 1 0 -1 -2 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 32 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  33. 33. Capital investment growth – next 12 months ALL PRODUCTION UK Energy, Water & Mining Manufacturing & Engineering CONSTRUCTION 6 5 4 3 2 1 0 -1 Q4 2012 -2 ALL SERVICES Retail & Wholesale Q1 2013 Transport & Storage Q2 2013 Banking, Finance & Insurance Q3 2013 Property Q4 2013 Business Services IT & Communications 6 5 4 3 2 1 0 -1 -2 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 33 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  34. 34. Export growth – last 12 months ALL PRODUCTION UK 9 8 7 6 5 4 3 2 1 0 -1 -2 Q4 2012 ALL SERVICES Retail & Wholesale Q1 2013 Transport & Storage Energy, Water & Mining Q2 2013 Banking, Finance & Insurance Manufacturing & Engineering Q3 2013 Property CONSTRUCTION Q4 2013 Business Services IT & Communications 9 8 7 6 5 4 3 2 1 0 -1 -2 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 34 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  35. 35. Export growth – next 12 months ALL PRODUCTION UK 7 6 5 4 3 2 1 0 -1 -2 Q4 2012 ALL SERVICES Retail & Wholesale Q1 2013 Transport & Storage Energy, Water & Mining Q2 2013 Banking, Finance & Insurance Manufacturing & Engineering Q3 2013 Property CONSTRUCTION Q4 2013 Business Services IT & Communications 7 6 5 4 3 2 1 0 -1 -2 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 35 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  36. 36. Employee growth – last 12 months -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Banking, Finance & Insurance IT & Communications All Service Industries Manufacturing & Engineering UK National Average Retail & Wholesale All Production Industries Property Construction Transport & Storage Business Services Energy, Water & Mining BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 36 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  37. 37. Employee growth – next 12 months -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 Banking, Finance & Insurance Transport & Storage Energy, Water & Mining All Production Industries Manufacturing & Engineering All Service Industries UK National Average Construction Retail & Wholesale Property Business Services IT & Communications BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com Slide number 37 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  38. 38. Trend of Business Confidence by Company Type UK Confidence Index ALL UK LISTED FTSE 350 ALL PRIVATE COMPANIES Private Companies Private Companies Large (250+ staff) SME (<250 staff) 40 30 20 10 0 -10 Q4 2012 Q1 2013 BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. Q2 2013 Q3 2013 Q4 2013 icaew.com Slide number 38 ICAEW / Grant Thornton Q4 2013 Business Confidence Monitor
  39. 39. Conclusions • Business confidence continued to rise in Q4 2013, suggesting that the economic recovery is gaining further momentum. • Confidence has now increased for five consecutive quarters. • Financial performance indicators such as reported turnover and profit growth have picked up and are expected to grow faster over the next 12 months. • Tentative signs are emerging that businesses are becoming more inclined to invest. • Pay restraint remains the order of the day, with expected growth in employee earnings standing below current rates of consumer price inflation. • Confidence has increased across all three main broad industry sectors – Construction, Production Industries and Services. BUSINESS WITH CONFIDENCE Copyright © ICAEW 2013. All rights reserved. icaew.com
  40. 40. A world leader of the accountancy and finance profession BUSINESS WITH CONFIDENCE icaew.com

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