Despite continuing uncertainty about the current political and economic climate, business confidence levels among credit managers representing a broad cross-section of UK industry rose over the three-month period to May 2010 to their highest levels for the past two years.
Significantly increased levels of confidence were evident in relation to payment discounts, settlement periods and the overall cost of credit management, while the remarkable rise in the numbers of respondents who expected their underwriters to react favourably to a request for an increase in insured limits continued for the fourth successive quarter. Meanwhile, there was an encouraging increase in the number of respondents who expected their export volume turnovers to improve over the next twelve months, and a general acknowledgement that credit managers are having a positive effect in helping to restore confidence and viability to UK business.
Commenting on the results, Moore Stephens corporate recovery partner, Steve Draine said “Following the slight downturn in confidence which emerged from the last survey, these latest findings represent a welcome return to the increased levels of optimism which were evident in the first nine months of last year. But it would be unwise to make too many predictions given the continuing uncertain political and economic climate. The markets are very volatile at present, not least as a result of the economic crisis in Greece and the measures being put in place across the EU to deal with it, as well as the change of government in the UK. There are those who believe that any change in government will provide an initial boost of confidence on all sorts of levels. There are others, however, who maintain that an incoming government invariably has a certain amount of bad news to impart and that, when it follows an outgoing administration which has presided over an extremely severe economic downturn, it is likely to impart it during the initial, honeymoon period of office, when the country is likely to accept that unpopular decisions are needed.
“For the moment, it would be wise to maintain a proper sense of proportion. The next six months are likely to be very revealing as the markets continue to react to the economic crisis in Greece, and as the measures introduced by the new UK coalition government begin to be implemented, and their effect felt. Sometimes, a change at the top can work wonders for national morale. But the fact remains that there are genuine fears about the immediate economic outlook, not least in the wake of dire warnings on the need to cut public spending. It will be interesting to see to what extent the political climate will affect the markets and the mood and fortunes of the business sector.“
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