The Brexit lull, with the UK’s departure postponed to October, has given the East Midlands housing market a boost. However that took its toll on businesses hit by weak profits. Confidence among industry bosses is low.
The May 2019 Royal Institution of Chartered Surveyors (RICS) survey shows the number of new properties being listed for sale improved last month, while interest from would-be buyers saw a rise in the number of people looking to buy a home. The increases however are marginal, as the market has been relatively flat for the best part of the year.
Despite the slight influx in interest from buyers and sellers, newly agreed sales continue to slip, leaving respondents cautious over sales activity for the three months ahead. Once again, the cautious outlook is set to be short-lived and Brexit related, as respondents still expect sales activity to increase in the coming twelve months. Agents do however, remain more optimistic for the year ahead as +36% expect prices to rise in the coming twelve months, up from +24% in April.
Meanwhile, business confidence in the East Midlands is low and has been hit by weak profits growth and Brexit concerns, according to a new study from Institute of Chartered Accountants in England and Wales (ICAEW). Slowing global trade is likely to be adversely impacting the East Midland’s relatively large manufacturing sector, while the ongoing uncertainty surrounding the Brexit process may also be dampening sentiment.
Businesses in our region, particularly manufacturers, still look to be taking precautionary Brexit measures such as stockpiling, with the proportion of companies reporting above normal stock levels higher than the national average. Confidence may also be suffering from weaker profits growth, which fell from 2.5% in Q2 2018 to just 1.7% in Q2 2019, the weakest rate across all of the UK. With sluggish market conditions apparent, a fifth of businesses in the East Midlands now report late payments as a growing issue.
Dr Sophie Dale-Black, ICAEW East Midlands Director, said: “Businesses in the East Midlands say that they don’t feel that things will change much in the next few months and this is reflected in their low confidence. Companies in the region are facing lots of challenges, with manufacturers especially facing problems. Business owners have told us that they need clarity and want politicians to start making decisions to help them plan their operations for what is at the moment an uncertain future.”
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