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British economy to struggle to gain momentum until second half this year: BDO

08 April 2013 21:21 (UTC +04:00)

Baku-APA. British economic conditions will struggle to gain momentum until the second half of the year even as business sentiment and hiring intentions improve, said BDO LLP on Monday, APA reports quoting Xinhua.

According to the latest business survey, the BDO Employment Index, which measures British businesses' hiring intentions over two quarters, reached 96.0 in March, the highest since August 2011.

This is the third consecutive month that the index has been at or above the crucial 95.0 level that indicates employment growth, suggesting the British businesses will help to offset the affects of expected public sector job cuts and boost the nation's ailing economy.

BDO's Output and Optimism indices, which predict short-run turnover expectations and business performance a quarter and two quarters ahead, however, stand at just 93.0 and 92.2 respectively. These figures remain well below 95.0 which suggests economic conditions will remain tough until at least mid-2013.

Sentiment of British service sector, which makes up roughly three quarters of the 2.43-trillion-U.S. dollar economy, moved up substantially in March, with output rising to 93.2 from 91.5 in February and optimism climbing to 93.2 from 89.6.

By contrast, the manufacturing sector's data continue to subdue. Optimism for manufacturers plummeted from a reading of 94.5 in February to 88.2 this month, while the BDO Output Index also fell, from 94.1 to 92.4.

"The depreciating value of Sterling coupled with weak demand from domestic consumers and struggling eurozone import partners is likely to be weighing on manufacturers' confidence," said BDO in a statement.

Britain's economy shrank in the fourth quarter and Markit Economics, a British economic research institute, said last week that its industry surveys point to growth of a "mere" 0.1 percent in the three months through March.