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New Year New Gloom

Despite all the positive signs at the back end of 2011, it appears the new year has brought about new pessimisms in both the business and contracting world.

Various sources have highlighted the likelihood that once again things will get worse before they get better, and that the time of financial insecurity has a while to run yet.

Predictions by the Ernst & Young Item Club and the Centre for Economics suggest that overall GDP shrunk in the last quarter of 2011, and this is highly possible to occur again at the beginning of 2012.

Britain’s economy remains, to a degree, correlated with that of the wider Eurozone, and the new year has not brought much cheer to our European neighbours either. France’s economy, the second largest in Europe, took a massive hit recently after its AAA credit rating was downgraded.

The fragile state of financial affairs being experienced currently is leading to a distinct lack of confidence in business decisions, and this is having negative repercussions on the contracting world.

The Morgan McKinley London Employment Monitor indicated a noticeable drop in the number of vacancies available in December. There is usually a drop around the festive period, but the drop of 30% is far higher than anticipated, indicating the affects of what has been described as a ‘subdued market’ by representatives for Morgan McKinley.

However, the British Chamber of Commerce has indicated that the current climate may well only be short-term, and there remain grounds for optimism in avoiding another recession. The BCC’s John Longworth said ‘A new recession is not a foregone conclusion. However, action is needed urgently to tackle short-term stagnation and a lack of business confidence, damaged by the ongoing Eurozone crisis.’

There is hope then that the business, financial and contracting worlds will sure up and pull away from the current economic quagmire. Unfortunately, only time will tell…

By Sean Dudley

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