Business confidence up

Business Trends: BDO

  • UK business confidence has increased for the tenth consecutive month
  • The Optimism Index, which predicts business performance two quarters ahead, increased from 101.7 in October to a 43-month high of 103.1 in November, taking it comfortably above the 100.0 mark that indicates the UK economy’s long-run average growth rate.
  • The Output Index, which predicts short-run turnover expectations, went up from 100.7 to 101.8 in November
  • The Inflation Index was down from 100.5 in October to 99.7 this month

Business trends positive

Business Trends: BDO

  • The Output Index climbed to a 26-month high of 96.8 in July up from 94.9 in June – a fifth consecutive monthly increase
  • Output in the services sector, which makes up roughly three quarters of the UK economy, rose from 94.7 in June to 96.5 in July
  • The manufacturing sector rose from 95.7 in June to 98.3 in July
  • The Optimism Index, which predicts business performance in two quarters time, moved up from 94.3 in June to 95.6 in July, posting its sixth consecutive monthly increase and standing at its highest level since April 2012
  • The Employment Index has continued to move upwards, increasing to 97.0 from 96.7 in June
  • The Inflation Index (overall inflation expectations) decreased to 102.2 in July, down from 103.4 in June

Business confidence up to 13-month high

Business Trends: BDO

  • The Optimism Index, which predicts business performance two quarters ahead, moved up for the fifth consecutive month from 93.6 to 94.3, a 13-month high
  • The Output Index, which predicts short-run turnover expectations, increased for the fourth consecutive month to 94.9 in June from 94.4 in May
  • The Inflation Index decreased from 104.2 to 103.4, thus easing financial pressures on UK businesses.

Signs of recovery?

Quarterly Economic Survey: BCC

  • Most key balances strengthened in Q2 2013 compared with previous quarter but most balances remain below their pre-recession levels in 2007
  • Service export deliveries balance rose to +36%,  the highest level since the survey began in 1989
  • Employment balances rose in Q2, following their Q1 decline.
  • Business confidence has again increased
  • Manufacturing confidence that turnover will improve rose seven points
  • Profitability confidence rose

BCC Economic Survey

Economic Survey: BCC

  • For both manufacturing and services, the key domestic balances are stronger in Q1 than in Q4, but overall the improvements are fairly modest and are still below pre-recession levels seen in 2007.
  • Export balances are strong, with service export orders and deliveries almost at the all time highs seen in 1994 (orders up 8 points to +26%, deliveries up 9 points to +33%).
  • It is disappointing that most employment balances weakened across both sectors (the manufacturing employment balance fell 4 points to +11%, and in services the employment balance fell 3 points to +6%).
  • Business confidence has increased further, with all balances much stronger than their average levels in the midst of the recession in 2008 – 2009.(Manufacturing turnover confidence rose 3 points to +44%, and by 2 points in services to +40%. Profitability confidence increased by 3 points in manufacturing to  +33%, the highest it’s been since Q4 2007, but was unchanged for services at +22%).
  • Investment intentions rose slightly overall in the first quarter. The balance of manufacturing firms looking to increase investment in plant and machinery rose three points to reach +14% – the best level since Q1 2012. In services, this balance increased by 4 points to reach +9% – the best level since Q4 2007.
  • Intentions to raise prices are weaker in Q1, particularly for manufacturers where balances dropped 19 points to +17%, which reflects reduced pressures from raw material costs. The balance of service firms expecting to raise prices fell 2 points to +19%.
  • The Q1 cashflow balances, though still relatively weak, are now in positive territory for both sectors. Cashflow for manufacturing firms edged down 1 point to +2%, while improving in the service sector by 7 points to +6%.
  • Overall, the Q1 results support our view that the economy will record positive but subdued growth in 2013