Belfast Telegraph

Monday 22 September 2014

Firms’ optimism at four-year high

Optimism among UK businesses was at its highest level for around four years last month, an industry survey has showed.



Firms registered “resounding” jumps in confidence and output in March, according to the latest Business Trends report by accountants BDO LLP, with its optimism index at the highest number since the summer of 2006.

But the report also warned of a risk to recovery without a “significant increase in investment from businesses in the private sector” and called on political parties to give more details of their economic plans.

According to BDO, whose Business Trends Report takes a weighted average of the results of all the UK's main business surveys carried out during the last month, the index of output has reached heights not seen since before the onset of recession in the third quarter of 2007.

The group said a rise in the output index, which measures short-term turnover expectations, means companies are re-stocking and this is boosting businesses' order books.

However the report also said that while general optimism had grown, its employment index signalled rising unemployment as firms lacked sufficient confidence to take on new staff.

“The sluggish job market, expectations of higher taxes, weak earnings growth, the reversal of the VAT cut and large levels of household debt mean consumer spending will remain weak,” the group said.

BDO urged political parties to provide “clarity” for businesses on their policy intentions and said lack of information over plans to tackle government debts was causing uncertainty and keeping investment levels low in 2010.

Partner Alex White said: “We are starting to see some political dividing lines on plans for taxation and public spending cuts but the political parties are keeping businesses in the dark on the substantive impact of their policies.”

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