Member Article

UK business leaders lose confidence in UK economy

Business leaders’ confidence in the economy has fallen to its lowest point in 2018, a new poll from the Institute of Directors (IoD) reveals today.

There was some optimism earlier in the year, following the progress made on phase one of Brexit negotiations in December. However the IoD’s Confidence Tracker shows that since April net confidence has fallen 19 percentage points back into the red.

Meanwhile, firms’ expectations for future investment and employment remained subdued, while a majority of directors anticipated rising costs for the year ahead.

After the UK’s general economic conditions, uncertainty around trade with the EU was the biggest concern of business leaders, having fallen out of the top three earlier in the year.

The survey of 750 business leaders, carried out by the Institute for Directors (IoD) employers group, found that after general economic conditions, uncertainty around trade with the European Union was the biggest concern. Asked how optimistic they were about the wider economy over the next 12 months, more said they were pessimistic than optimistic, resulting in a net confidence level of -16 percent.

That compared with -11 percent in June, and down from a positive rating of 3 percent in April. The IoD said 44 percent cited uncertainty over the trading status with the EU as having a negative impact on their organisation.

Nick Felton SVP MHR Analytics said, “These findings reinforce a clear pattern of business confidence being shaken by uncertainties over Brexit and wider market turmoil. With research suggesting that around 93 per cent of UK businesses are anticipating a drop in revenue next year, it’s high time that decision-makers started working on scenario modelling to look at different outcomes, depending on the performance of the economy.”

“As part of this approach, business leaders need to look again at IT investment and introduce analytics to improve decision-making whilst reducing administration. With 2019 set to be a year of uncertainty for many organisations, those that improve critical operations such as planning, reporting and forecasting processes will thrive, those that fail to do so could struggle to survive,” concluded Felton.

This was posted in Bdaily's Members' News section by Nick Till .