UK
business confidence slipped to its lowest level in three years during the final
three months of 2001, research reveals.
A
survey by the Institute of Directors shows that the balance of companies which
were more rather than less optimistic about their prospects fell from 23 per
cent in October to 10 per cent in December.
The
IoD blames the drop in confidence on a decline in production and a slump in new
orders.
The
balance of firms reporting higher output during the three-month period fell to
33 per cent from 38 per cent in September and the balance of respondents
reporting a decline in new orders increased to 17 per cent from 1 per cent.
Manufacturers
reported a particularly steep drop in new orders. "The manufacturing
sector continues to underperform the rest of the economy, reflecting its
exposure to difficult overseas trading conditions and the weak euro," said
Ruth Lea, head of the IoD’s policy unit.
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But
the IoD is optimistic that interest rate cuts last year and an increase in
public spending will help improve the economic picture this year.
