UK’s firms brimming with confidence as 2013 comes to an end

BUSINESS confidence is at a three-and-a-half year peak in the UK, as a new survey reveals firms’ rosy outlook for the first half of 2014.

BDO’s latest business trends report, released today, shows that after two quarters of solid economic growth, companies are still becoming more optimistic for the year ahead.

The firm’s optimism index reached 103.1, rising from last month and above the 100 mark, which indicates long-term growth.

The individual parts of BDO’s index are also positive, with expectations for turnover in both manufacturing and services sectors improving from October. The firms responding also noted a drop in price pressure, with the inflation index falling to 99.7, below the long-term average,

The survey’s authors suggest that meagre increases in wages have held costs down for services firms, while a 2.3 per cent drop in the price of oil during the year to November has given manufacturers a some welcome assistance.

However, the employment element of the index still lags healthy levels, reaching only 98.3.

Peter Hemington of BDO commented: “We can finally say that the key economic battle ground has shifted from austerity to the new debate about how the government can help UK businesses achieve sustained growth.”

Hemington also added a dose of cold water to the report’s confident tone, calling the UK’s educational performance and planning system “substantial long-term problems”.