Survey to report on business confidence post-Brexit
Credit professionals are being urged to take part in a survey to show how levels of business confidence have been impacted in the first full quarter following the Brexit vote.
If the Chartered Institute of Credit Management’s (CICM) UK Credit Managers Index (CMI) reports another drop in confidence, it would represent a worrying three-Quarter trend; however recent economic data is suggesting that business confidence is currently experiencing a ‘rebound’.
Prior to the Brexit vote, around half of all credit professionals, those at the heart of determining risk and managing cashflow, believed a Brexit vote would have little or no impact on their business. The upcoming Index will report on whether credit professionals are of the same mind, or have changed their opinions.
Philip King, Chief Executive of the CICM, believes that the UK is currently experiencing a honeymoon period: “With a fall in the pound and a continuation of the pre-existing EU trade agreement, the UK has the best of both worlds,” he says.
“This is likely to have a positive impact on short-term confidence, but it is not yet clear how impactful new trade deals will be on confidence until they are understood and signed.”
The Index, sponsored by Tinubu Square, is important because it gauges nationwide levels of credit being sought and granted by credit professionals across both the manufacturing and services sectors. It therefore acts as a primary indicator of actual levels of business being conducted.
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 – and the Index is calculated on a simple average credit professionals’ views and statistics are sought on such issues as applications for credit through to days sales outstanding.