2020 Prediction: Low business confidence will take UK into longest period of falling investment for 20 years

Companies in the UK have demonstrated low business confidence since 2017, with a clear causal link to ongoing Brexit uncertainty. This is likely to continue into the coming year...

While businesses predict that confidence will rise in 2020, the number is growing from a low base and it remains low overall.  While global confidence is set to rise to 64% in by May 2020,

in the UK it will rise only 4% to a much lower 40%[1]. The result of this low confidence level is that Britain’s business leaders are pulling in their horns and have put the UK on course for a long-term slump in business investment. 

In fact, in September 2019, the British Chambers of Commerce predicted that UK companies would put investment plans on hold through at least the first half of 2020, meaning that investment will have been falling for three years in a row – longer than at any period since the bursting of the millennial dotcom bubble. 

Our survey gives further colour to this prediction, with UK business leaders reporting that they do not expect to increase investment in any area – the only region globally to be so muted in its planning. 

Decreases were big across every area of spend, but the lowest cutbacks were in the following three areas:

• Technology - investment set to decline from 54% of companies investing to 47% in 2020,
• R&D – investment set to decline from 49% of companies investing to 40% in 2020,
• Topline sales – investment set to decline from 49% of companies investing to 42% in 2020,
• Permanent staff – investment is set to decline from 43% of companies investing to 40% in 2020.