News Article

Business News

Is Brexit talk actually hurting business confidence?

By CreditMan Wednesday, March 16, 2016

The Chartered Institute of Credit Management (CICM) is seeking the views of the manufacturing and services sectors in its quarterly national barometer, the Credit Managers’ Index (UK CMI), and specifically whether talk of a Brexit is impacting business confidence.

Having finished 2015 with flat results, the barometer will play an important role in assessing the outlook for growth and nationwide levels of business confidence in the first quarter of 2016.

With 2015 seeing two all-time high results and an unexpected 7.1 percent fall, the survey’s respondents will define whether volatility is set to continue in 2016.

Philip King, Chief Executive of the CICM, says the UK CMI is a reliable indicator of business confidence in the UK: “It has shown to consistently track the highs and lows of international stock markets, including the FTSE All Share Index, emphasising its reputation as a trusted resource.

“But with political uncertainty surrounding Brexit, as well as instability in the emerging markets, it will be interesting to see which direction the UK CMI takes.”

The Index, sponsored by Tinubu Square, is important because it gauges nationwide levels of credit being sought and granted by credit managers across both the manufacturing and services sectors. It therefore acts as a primary indicator of actual levels of business being conducted.

“We encourage all credit managers, Government departments, business organisations and members of the CICM to submit their answers and experiences to the Q1 survey,” Philip concludes.

The CMI is a diffusion Index producing ‘scores of between one and 100 (typically in a range of 40-60). Ten equally weighted factors are included – three favourable and seven unfavourable –of and the Index is calculated on a simple average of the ten factors.