Business conditions also witnessed a downturn, dropping to their lowest point since early 2022. Although these conditions remain above the long-term average, they have significantly receded from their mid-2022 peak. The current stability in business conditions is primarily supported by robust employment numbers, with trading and profitability hovering close to their long-term averages, as per the survey.
Business conditions fell by four points to 9 index points, still above the long-run average. Trading conditions dropped by six points to 13 index points, and profitability decreased by six points to 6 index points, while employment maintained its level at 8 index points.
Forward orders have also softened, aligning with the declining business confidence, suggesting an anticipation of further weakening conditions. However, capacity utilisation remains high, continuing to contribute to elevated price pressures. Both input cost and output price inflation remain high, reflecting ongoing economic challenges.
A significant drop in business confidence was recorded, falling six points to minus 9 index points. Most industries witnessed declines, including a sharp 16-point fall in the retail sector.
The stability in conditions and confidence observed through mid-2023 has been disrupted, pointing to an unlikely improvement in growth for the fourth quarter from the weak results seen in the third quarter's national accounts. The survey concludes that while slower growth is expected to eventually lead to reduced inflation pressure, this easing will lag behind the overall economic activity.
ALCHEMPro News Desk (DP)
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