The British Chambers of Commerce have published their Quarterly Economic Survey; with over 6,000 business responses making up Q2 for 2018.
Reports of tougher trading conditions continue to advance from consumer-facing industries such as retail and hospitality. Similar problems continue to arise such as a lack of consumer spending, which is currently a nationwide problem, and cash flow and investment falling significantly.
The number of firms in the manufacturing sector reports that domestic sales are improving, with this quarter’s results rising to the highest level since Q1 2015.
Due to the size of this sector, unfortunately, it’s contribution to UK growth is fairly limited. In the second quarter, manufacturers reporting improved export sales and orders have eased. This suggests global economic growth is slowing and forcing firms to look domestically for sales.
Another drop this quarter is in the number of business reporting they are looking to invest across the nation. The British Chamber of Commerce reports a ‘subdued outlook’. They go on to say that the biggest concern for businesses as a result of the Quarterly Economic Survey the percentage of firms reporting problems with difficulties trying to access skills.
Key findings in the Quarterly Economic Survey, Q2 2018 survey from the BCC website:
- The balance of firms reporting increased domestic sales rose from +17 to +22, while the balance reporting improved domestic orders also rose, from +16 to +22
- The balance of firms reporting increased export sales fell from +30 to +24. The balance reporting improved export orders also fell, from +28 to +22
- The balance of firms increasing investment in training fell, from +22 to +19, while the balance of those increasing investment in plant and machinery held steady at +20
- The percentage of firms looking to recruit jumped from 67% to 77%, while the number of those struggling to recruit also rose, to 71%
- Cashflow continues to be a concern within manufacturing, with just +6% reporting improved cashflow. In construction, the balance falls to +2%
- The balance of firms expecting turnover to increase nudged down slightly to +47 (from +48)
- 65% of firms in the sector expect the cost of their raw materials to rise in the next three months
- Confidence that turnover will improve over the next twelve months eased slightly from +48% to +47% Confidence that profitability will improve over the next twelve months held steady at +35%
- The balance of firms reporting increased domestic sales rose from +20 to +23, while the balance reporting improved domestic orders fell slightly from +16 to +15
- The balance of firms reporting increased export sales also rose, from +13 to +15. The balance reporting improved export orders also rose slightly, to +12 from +10
- The balance of firms increasing investment in training fell slightly to +16 from +18
- The percentage of firms looking to recruit rose from 50% to 60%, but the number of those struggling to recruit also rose to 63% (from 60%)
- Cashflow is a concern, with just +9 reporting improved cashflow. Consumer-facing firms struggled more, with the number falling to just +4
- The balance of firms expecting turnover to increase in the next year nudged down slightly, from +42 to +40
- Among B2C firms, the balance of firms expecting to turn a profit is +21, compared to +43 for B2B firms
- Confidence that turnover will improve over the next twelve months eased from +42 to +40 Confidence that profitability will improve over the next twelve months decreased from +33 to +29
The BCC also reports “All this shows the economy is in a holding pattern, with annual economic growth this year set to be the lowest since the financial crisis. Much more needs to be done to put the UK economy on a surer footing. The BCC calls for a push to fix the fundamentals for business – fixing the crisis-hit training system, improving connectivity, delivering infrastructure improvements, and incentivizing investment – to create a “Brexit hedge” for the economy. At the same time, the government urgently needs to provide clarity on the real-world questions that businesses are asking on the UK’s status after leaving the European Union, to give firms a clear path that would enable them to invest and grow.”
Where R&D Comes In:
Research and Development claims are a specialist area of taxation and, if the process is done correctly, claims can come back totalling numbers that can push businesses towards further advancements in equipment, materials, staff and overall workflow and production in turn.
The HMRC initiative for Research and Development aims to reduce the likelihood of problems like this spiralling into a new economic crisis. Not only does the initiative promote innovation; but it’s pumping money back into hard working UK businesses. The cash rebates received by UK Limited companies through the initiative can help continue the growth of businesses: new equipment, machines, materials and even taking on new staff, have all been results of cash benefits from HMRC, through the Research and Development initiative.
Although the initiative has been in play since 2000, recent years have seen claims for Research and Development tax skyrocket, as the eligibility for submitting claims has opened to a much wider range of industries since Brexit, with the hopes to boost the UK Economy.
With this news coming to light, now is a better time than ever to start a claim or to start investing in innovation, with the knowledge that your hard work will be rewarded. A shocking 95% of UK companies eligible to claim, still haven’t due to common misconceptions that they are not eligible.
We work on a success-only basis, meaning we never waste the time of our specialists or your business if we don’t see R&D in your work. In one obligation-free phone call, our experienced industry experts will be able to find out whether your company has eligibility to get started on the process.
We work purely with Research & Development Tax Credits Claims and have a seamless process that assures no stone goes unturned and your company can maximise your benefits from HMRC.
Get in touch today or alternatively, for more information on the initiative click here, to find out more about how to claim, click here and to find out more about how our service can help your business to continue to grow, with claims at an average of £42K, click here.