It seems all that talk of high street gloom was just that – talk. According to the latest monthly figures from BDO, retail sales were up 3.5 percent sequentially in August. It was the best result since February and although the business climate is far from perfect, things appear to be getting better.
Don Williams, head of retail and wholesale at BDO said the feel-good factor last year came from the Olympics, which means it was artificial, but this year it has more to do with the tone in the media and people being less fearful of getting sacked.
“There is no doubt confidence is returning slowly,” he said.
Homeware sales were up 20.2 percent, the best result since 2007, but fashion wasn’t that hot with an 0.3 percent drop.
“The overall outlook for the UK high street was also positive,” Williams added.”This has been a strong month overall.”
Williams also noted that retailers are getting better at managing their cost base and they are investing more in online.
Accountancy firm BDO has released a report that suggests business confidence is at a 21 year low in British history.
The company’s BDO Optimism Index, which has been running for 21 years and looks at emerging trends over the following two quarters, dropped to 88.9 in January compared to a reading of 90.3 in December, which is the eighth month in a row that the index has been below the growth metric of 95.0. According to BDO, this suggests trouble for Q1 2013, especially taking figures from the Office for National Statistics into account that threatened a triple dip recession.
BDO’s Output Index, which looks at and predicts turnover expectations, also fell – supporting a looming triple dip recession as it dropped from 93.1 to 92.3, again short of the 95.0 growth mark.
Although the outlook is bleak, BDO believes there are small signs of improving confidence, such as in the company’s Employment Index, which rose to 95.1 in January from 93.0 in December. This is the first time it has passed the 95.0 mark since last April, and also supported the ONS’ data on unemployment dropping in the three months to November. Manufacturer confidence should also be reason for some cautious optimism, which rose to 95.2 in January compared to 91.9 in December.
Partner at BDO LLP, Peter Hemington, said in a statement that despite strengthening in labour, “business confidence continues to weaken, and improved hiring intentions are not translating into growth plans”.
“It sees the damaging effects on businesses of five years’ zigzagging economic growth,” Hemington said, leaving them “wary” of making expansion or investment plans. A crucial tonic for bringing the economy out of a slump, according to BDO, will be providing growth incentives.