Businesses delay investment due to double dip, says poll
An IoD survey shows low confidence among business leaders
Business leaders think there is little or no chance of the economy emerging from the double dip this year, forcing companies to put off investment due to economic uncertainties, a new poll showed on Wednesday.
Of almost 1,300 members of the Institute of Directors polled in its latest study of business opinion, 76 percent had delayed investment decisions while 65 percent had postponed hiring staff.
The poll showed 44 percent said they had postponed at least one investment or employment decision this year due to business or economic uncertainties.
Adding more pressure on the coalition government, the majority of IoD members polled consider the government to have been “ineffective” in every critical area that affected business growth including tax, regulation, education and infrastructure.
Over two-thirds of respondents thought the government had been ineffective in reducing regulation and tax complexity, while 62 percent thought they had not been effective in simplifying employment law.
Graeme Leach, IoD’s chief economist said the “overwhelming opinion of our members is that [the government] are doing too little, too slowly”.
“Business is battening down the hatches in the expectation that the recession will continue for the rest of the year. That is bad news for the economy at large, because decisions to invest money or take on more staff are being postponed until things look up,” saidLeach.
“If the Coalition wants to break this cycle of low economic confidence, then they need to take some bold steps that will make a real difference to the cost and complexity of doing business in the UK.”
The government is increasingly coming under fire for failing to kick start the economy despite some lacklustre attempts at credit easing measures. Even the International Monetary Fund recently told chancellor George Osborne he may have to curb his strict austerity plan to boost the economy.
A central tenet of this government has been to retain the UK’s triple A credit rating by reducing one of the largest peace time budget deficits. But recently Treasury minister Danny Alexander said the triple A rating wasn’t the “be-all and end-all”.
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