Managers' pessimism about their prospects contrasts with their current performance showing increases in both demand and output. Nearly half of managers surveyed report an increase in sales and 18 per cent a fall - a net 31 per cent, up from 29 per cent last quarter. Managers also report a six point increase in output to a net 28 per cent. Looking ahead to the next quarter, managers' projections are bleaker than their forecasts last quarter. A balance of 33 per cent expect output to increase as opposed to a net 42 per cent last quarter and there is a fall of four points to a net 41 per cent of managers expecting customer demand to continue increasing.
Managers indicate a cooling in inflationary pressures.
A net 13 per cent of managers expect to increase their prices compared to 23 per cent last quarter. There is also a drop of six points in managers expecting their costs to rise, a net of 29 per cent from 35 per cent. The Management Trends survey also tracks managers' investment plans over the next 12 months. The highest level of investment anticipated by managers is in communications and information technology where a net 58 per cent anticipate increasing spend. Gordon Brown's Budget has only served to increase nervousness, particularly among hard-pressed manufacturers.