15 Feb 2019

Owner managed businesses, including farms and businesses in agriculture, are holding back investment decisions and are more pessimistic about the economic outlook than this time last year according to a new report.

Co-authored by East Midlands-based accountants, Duncan & Toplis and 15 other members of the Association of Practicing Accountants (APA), the report has been based on responses from 475 businesses across a wide range of sectors, including 85 businesses in agriculture.

The research indicates that:

  • The majority of respondents were either unlikely or very unlikely to make major capital investments in the next 12 months
  • The largest single minority of respondents thought that on balance the UK is likely to be worse off in 12 months and in the next 5 years as a result of Brexit
  • While there was more optimism (43%) than pessimism (21%) about growth over the next 12 months, only 18% were more optimistic than this time last year
  • The biggest challenges facing these businesses over the next year include the impact of Brexit, the economic outlook, recruiting and retaining the right people and regulatory burdens Positively, 68% of respondents believed that they had sufficient access to finance over the next 12 months with bank loans and asset finance being the most used options

Commenting on the findings APA Chairman Clive Stevens said, “What is clear from our research is that concerns over Brexit and the broader economic outlook are negatively impacting on the investment decisions our clients are making. As drivers of jobs and growth across the real economy they need clear direction from the government on what they can expect over the next 12 months.”

Managing Director of Duncan & Toplis, Adrian Reynolds added, “The findings from this survey of 475 businesses across the country reflects what we’ve been seeing in Lincolnshire, Nottinghamshire and Leicestershire where we operate. Capital investment can be seen as a big risk for businesses and in the current environment where the future is very uncertain, it’s understandable that businesses would be avoiding that kind of spend or putting it off until things become clearer.

“Businesses that import or export will perhaps be impacted the most by changes in Britain’s international trading relationships, but other businesses are also holding back because of the far-reaching consequences that different forms of Brexit may have. Overall, businesses are still more optimistic than they are pessimistic about growth, but that optimism has slipped since this time last year.”

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