Sentiment among Construction firms falls
While our Business Sentiment Index (BSI), which measures SME business confidence, has risen modestly for the third consecutive research period, the Construction sector has seen a fall in confidence.?
Appetite for investment
Construction firms’ appetite to invest dipped from 69% in September 2023 to 60% in January 2024 as the UK economy continues to perform sluggishly, interest rates remain at their highest levels for some time, and the housing market experiences ongoing uncertainty.
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Missed opportunities
The number of companies that have missed business opportunities because of a lack of available funding continued to fall and this latest figure is in line with the more normalised levels achieved for this question, last seen in May 2022.?
At 34% (Sept 2023: 46%), the Construction sector’s responses outperform those of the UK as a whole.
Economic outlook
Confidence in the macroeconomic outlook among SMEs has incrementally improved, achieving positivity for the first time in around two years, but it’s worth remembering that in November 2021, 75% of respondents were positive about the economy – by January 2024 this had reached just 46%, which is itself an improvement compared to September 2023 (43%).
The latest results suggest that positivity has; however, fallen back quite significantly for Construction firms, which – given the headwinds the sector is facing – confirms what many are experiencing.
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Predicted business performance
Contrary to the overall BSI result, predictions about future business performance fell slightly. Most firms expect to continue treading water in 2024, with their prospects remaining unchanged.?
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Steve Gee, CEO of Close Brothers’ Industrial Equipment Division, said: “The recovery in confidence, albeit cautious, among the UK’s small and medium business owners continues, is clearly positive news.
“However, our research reinforces the feedback we’re getting from the stakeholders in our key sectors that the recovery in sentiment very much depends which industry they operate in.
“Our commitment to the SME community is that we will continue to work with firms through the cycle, providing expert advice and building long-term relationships, as we’ve always done.?
Methodology:*
All figures, unless otherwise stated, are from a Censuswide survey conducted in January 2024. The survey canvassed the opinion of over 1,200 senior members of the professions across the UK on a range of issues affecting their businesses.