Businesses prepare for the double-dip

Lots of media coverage today on the latest survey by accountants BDO which suggests that UK businesses are fully expecting, and preparing for, a double-dip recession.

This article in the Guardian has a useful summary.

Those students who have already studied the reaction of firms to recent recession in the UK will find many of BDO’s findings and business terms familiar.  The survey points to falling business and consumer confidence, cuts in investment spending, likely job losses and anticipated capacity cuts.  All are classic actions of businesses which expect the economic outlook to get significantly worse in the next year or so.

I know from various meetings with educational and other publishing businesses last week that the CEOs of those firms are dreading the next 6-18 months.  Firms reliant on public sector spending are particularly gloomy. It is easy to forget just how many businesses rely on government spending for their demand.  In our market, good examples are the major textbook publishers who are now looking into the abyss.

My guess is that we’ll hear the term “double-dip” used increasingly frequently by the media over the short-term, not the least after the result of the government spending review are announced in October.

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