UK bosses’ confidence in the economy was buoyed by vaccine optimism to its highest level since just after the Brexit referendum, a new survey has shown.
The confidence tracker from the Institute of Directors (IoD), a body for business leaders, has been in positive territory for around 12 months. A positive score means more company directors are optimistic about the economy than are pessimistic.
UK business leaders’ confidence grew incrementally this year, after spiking when the coronavirus vaccines were approved for use in December. Last year, a sharp drop in business directors’ confidence was recorded amid the first coronavirus lockdown in the UK.
Surveying 651 directors, the IoD’s tracker of confidence in the business climate rose to 27 points in June, up from 14 points at the end of Q1.
This, it said, was the highest level of business optimism since the IoD began recording its members confidence in July 2016, in the wake of the Brexit referendum.
Business directors’ confidence in the 12-month outlook for their own organisation also rose to a joint record high of 50 in June after ending Q1 at 41.
Investment and hiring intentions for the year ahead also picked up, as businesses were given some clarity around the end of lockdown and Brexit uncertainty seemed to be “in the rear-view mirror,” the IoD said.
“After a turbulent period of battling to keep businesses afloat, directors are now raring to go,” said Tej Parikh, Chief Economist at the IoD.
“With most of the economy now reopen firms are brimming with optimism for the year ahead, despite the recent delay to the roadmap.
“Directors are eager to rebuild their workforces to meet pent-up demand as new-found confidence has seen consumers reaching for their wallets,” Parikh added.
The bounce-back in economic activity does bring challenges, the IoD warned, citing debt, repayments, supply chain issues and the post-Brexit skills shortage as the main issues business directors are now facing.