The CMI's Economic Outlook report, which tracks business confidence among the UK's senior executives, reveals that the recession is still negatively impacting on 82% of businesses and shows that job insecurity is at record levels (with 44% feeling insecure compared with 27% six months ago.
Despite signs of fledgling economic recovery, 41% of managers maintain that their business operations remain severely hampered by the effects of the recession. The result is a fragile business environment, which has the potential to delay the UK's recovery still further. And levels of morale have worsened compared with six months ago, according to 63% of organisations.
Almost half (48%) of UK organisations have kept pay freezes in place, up 4% on six months ago, and 52% have closed their doors to new recruits, despite assertions by some experts that the jobs market is steadily improving.
Lord Eatwell, chief economic adviser to CMI, says: "The economy is growing, albeit at an anaemic 0.2%, but the promise of recovery is not enough to sustain our businesses while they wait for the situation to improve. Practical help and support is urgently needed. Managers are integral to driving our recovery, but a lack of available finance and poor levels of employee morale are hampering their efforts. If they are to turn the situation around, then Government help is urgently required."
The majority (68 %) of respondents are fiercely opposed to the proposed increase in employer National Insurance contributions. To try and alleviate the pressure, CMI is renewing its call on the Government to provide tax breaks so employers can invest in skills and to introduce measures to improve bank lending to businesses.
Eatwell added: "British management faces major challenges: in securing the funds and the skilled labour necessary to sustain efficiency; in maintaining morale in their organizations; and in developing the vision and commitment to the investment needed to rebalance the British economy. We cannot and will not recover without the determined efforts of our managers, but they are struggling to return to business as usual in an increasingly hostile environment. It is evident from our research that the new Government will need to make it an economic priority to support managers in every way possible, post-election, to help transform the business environment and stimulate recovery and growth."
Ruth Spellman (pictured), chief executive of CMI, added: "It is very telling that UK managers' strongest support for Government policy revolves around investment in skills development. No matter what the economic conditions, UK plc has no hope of a quick recovery or renewed competitive success without a skilled workforce at its helm. Throughout the downturn CMI consistently warned that a burgeoning skills gap had the potential to undermine recovery and destroy business confidence. The results of our report justify these concerns. Action is needed now, before the resulting damage becomes irreversible."