Business confidence down, surveys reveal
Confidence among UK businesses is falling, two surveys have shown.
The latest Labour Market Outlook, published by the Chartered Institute of Personnel and Development (CIPD) and consultancy KPMG, showed more employers are planning to cut jobs rather than expand their workforce in the third quarter of this year.
Meanwhile, accountancy firm BDO's Business Trends optimism index from fell to 95.1 in July from 95.6 in June.
Both reports suggested weaknesses in the manufacturing sector are behind the dip in confidence.
Commenting on the potential reduction in employment levels, CIPD public policy adviser Gerwyn Davies said the fragile economic situation on global markets is having a negative effect on firms and their prospects.
"Increasing uncertainty about growth prospects in both the UK and global economies is now affecting hiring intentions, particularly in those industries such as manufacturing that stand to lose most in the event of a global slowdown," he stated.
BDO partner Peter Hemington suggested the nature of the UK manufacturing industry means businesses are not reaping the benefits of the currently weak pound.
"The rapid decline of the manufacturing sector, championed as the key to a rebalancing of the UK economy, is alarming," he told the BBC. "These days manufacturing in the UK is more about bolting things together that are made in the Far East.
"The problem with that is that if you have a marked decline in sterling, it does help you with your sales price, but the price of the components you have to buy in from the Far East goes up," Mr Hemington added.
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