Quoted company optimism shrinks to pandemic levels
Optimism over the UK economy has retreated to its lowest point since the start of the Covid-19 pandemic among small and mid-cap companies, new research for the Quoted Companies Alliance (QCA) has found.
Confidence in the coming 12 months has suffered amid the fallout from the Truss government mini-budget, the ongoing Ukraine conflict and stubbornly high inflation.
At 33.1, the latest company reading from the QCA’s Sentiment Index, produced in collaboration with YouGov, is the second lowest in the survey’s 11-year history.
However, quoted companies remain positive that they can carry on growing despite external challenges.
On average, those surveyed expect turnover to swell by 11.8% over the next year, down from a predicted 19.7% rise six months ago.
And they see headcount growing by 5.6% in the same period, which is a reduction from the forecast 10.9% increase in the last research wave.
Companies are less likely to raise fresh capital than six months ago, although if they were to do so, public equity would be the preferred route. Bank finance was briefly favoured ahead of public equity in the QCA/YouGov survey carried out in Q4 2021.
James Ashton, chief executive of the Quoted Companies Alliance, said: “Given the political and financial machinations of the last two months it is no surprise that optimism among quoted companies has been dealt a blow.
“What is important now is a period of certainty and stability for growth stocks seeking to increase sales and hire new staff even as the economic outlook darkens.
“For the longer term, it is vital to keep up momentum in reforming public markets so that London is a go-to destination to raise capital and those companies operating transparently and distributing wealth far and wide are not disadvantaged by onerous cost and complexity.”