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Highlights
UK business confidence has plummeted to a 15-month low of 28% in June, as per Lloyd’s business barometer.
The fall in confidence comes with the UK inflation levels hitting a new 40-year high of 9.1% in May.
Around 56% of UK businesses are looking forward to increasing the prices of their products and services next year.
Amid the growing cost-of-living squeeze, UK business confidence has plummeted to a 15-month low level in June. Declining by 10 points, the business confidence plunged to 28% during the month, as per the Lloyds Bank (LON: LLOY) business barometer. Since the UK economy recovered from Covid’s second wave in March 2021, the business confidence hasn’t been this low.
The fall in confidence comes with the UK inflation levels hitting a new 40-year high of 9.1% in May, slightly higher than the 9% in April. The cost-of-living crisis has been squeezing the budgets of households, which in turn is leading to a decline in business activity due to restricted demand. Consumer confidence has also been going down while the UK’s GDP growth is shrinking.
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Approximately 56% of UK businesses are looking forward to increasing the prices of their products and services next year as inflation levels are expected to surpass the 10% mark soon. While 49% of the businesses were positive about their trading prospects and the overall economy, 15% were not as optimistic about the trading prospects and 27% were about the economic situation.
Businesses are trying to absorb as much of the rising cost pressures as possible, but if the trend continues, they would be forced to pass on these costs to the customers. The confidence of businesses in the three key sectors, manufacturing, construction, and services declined, which indicates the falling levels of optimism in the economy.
Approximately 56% of UK businesses are looking forward to increasing the prices of their products and services next year as inflation levels are expected to surpass the 10% mark soon. While 49% of the businesses were positive about their trading prospects and the overall economy, 15% were not as optimistic about the trading prospects, and 27% were about the economic situation.
Businesses are trying to absorb as much of the rising cost pressures as possible, but if the trend continues, they would be forced to pass on these costs to the customers. The confidence of businesses in the three key sectors, manufacturing, construction, and services declined, which indicates the falling levels of optimism in the economy.
In these uncertain times, investors can keep an eye on the following industrial stocks offering decent returns.
John Menzies plc (LON: MNZS)
John Menzies plc is a UK-based aviation business that offers services like cargo handling and forwarding, ground handling, etc. As of 30 June 2022, the company has provided its shareholders with a huge return of 91.94% on a year-to-date (YTD) basis, while its one-year return stands at 88.89%. However, its Earnings Per Share (EPS) lie in the negative territory, at -1.51. John Menzies currently holds a market cap of £548.03m and its shares were trading at GBX 596.00 at 11:40 AM (GMT+1) on 30 June 2022.
BAE Systems plc (LON: BA.)
BAE Systems plc is a leading UK-based arm, security, and aerospace group. As of 30 June 2022, the FTSE 100 company has provided its shareholders with a return of 50.75% on a YTD basis, while its one-year return stands at 58.35%. Its EPS stands at 0.55. BAE Systems currently holds a market cap of £26,100.28m and its shares were trading at GBX 827.40, up by 0.05%, at 11:50 AM (GMT+1) on 30 June 2022.
Qinetiq Group Plc (LON: QQ.)
Qinetiq Group Plc is a UK-based globally operating defence technology group. As of 30 June 2022, the FTSE 250 company has provided its shareholders with a return of 37.37% on a YTD basis, while its one-year return stands at 9.21%. Its EPS stands at 0.22. Qinetiq Group currently holds a market cap of £2,111.31m and its shares were trading at GBX 365.40, up by 0.16%, at 11:53 AM (GMT+1) on 30 June 2022.
