Firms upbeat as commodity prices plummet

Chris Papadopoullos
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LOWER commodity prices pushing down costs is helping to keep UK firms optimistic about the future, new survey data reveals today.

The optimism index published by accountants BDO scored 103.2 in July, according to figures released this morning. While the figure is lower than June’s score, signalling slightly lower confidence, it is higher than the long-term average score of 100.

Companies said they had been buoyed by low commodity prices which are keeping costs down and lifting profits. Oil prices have remained subdued this year, but many other commodities have also fallen in price. Copper prices last week hit their lowest price since 2009.

Brent crude, a North Sea benchmark, is currently $48.61 per barrel – less than half of what it was a year ago. But firms are also facing headwinds.

“As the UK’s success continues to exceed other markets, the strong pound will make it harder for our exporters – particularly manufacturers – to find customers,” said BDO partner Peter Hemington.

The pound has climbed 16 per cent against the euro this year, making British goods and services more expensive for Eurozone buyers.