Monday 10 February 2020 12:01 am

Business confidence rises across manufacturing and services sectors

Business confidence rose across the manufacturing and services sector for the first time in 18 months during January.

Accountancy firm BDO’s optimism index increased for a third consecutive month in January.

The index, which weights macroeconomic data from the UK’s main business surveys, now stands at 95.84, slightly above the 95 mark which indicates growth.

The manufacturing optimism index increased 0.05 points as output rose for the first time in 15 months.

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Manufacturing output rose 0.47 points, however the index remained at 86.78 points, well below the point of contraction (95).

There was also an increase in confidence in the services sector which gained 0.13 points.

Despite optimism improving across both sectors, it remained low by historical standards.

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The output index fell to its lowest level since July 2019, dropping 0.59 points to 95.8 points.

The marginal improvement in manufacturing output was offset by a 0.73 decline in services sector output which accounts for approximately 80 per cent of the UK economy.

BDO’s employment index rose for a third consecutive month to hit 112.46 points, up 0.21 points from December as increased confidence boosted hiring.

Peter Hemington, partner at BDO, said: “The fact that we are seeing increasing optimism across both the services and manufacturing industry is a healthy sign. It remains to be seen whether businesses can shake off their Brexit blues, but if this month’s employment index is anything to go by, the initial signs are positive.”