Business confidence has crashed to the lowest point since 2012, and the economy is only growing because firms are stockpiling ahead of Brexit, according to a key sentiment indicator.
The BDO optimism index, which charts how businesses expect output to develop in the next three to six months, fell faster in March that at any time since the bleakest days in the aftermath of the Lehman Brothers collapse in 2008.
The figures suggest that the UK economy could struggle to post any positive growth in 2019, BDO said.
The fall in confidence has been led by the previously robust services sector. “In absolute terms, sentiment is now weaker than its previous low point after the UK’s vote to leave the EU in 2016,” the BDO said.
“The services sector, which comprises around 80% of UK GDP, drove the overall decline in confidence with the sector index falling by a dramatic 4.15 points to 95.13 in March.”
BDO’s separate output index, which measures UK business output growth, reported a slight improvement, suggesting that the economy is performing better than expected given the challenges around Brexit and ongoing concerns about global trade.