Businesses optimism on a high

Business Trends: BDO

  • UK business optimism reached its highest level for 22 years in January, indicating that the economy will continue to grow rapidly over the coming six months
  • The Optimism Index, which predicts business performance two quarters ahead, reached 103.8 in January, up from 103.4 in December. This is the highest reading ever recorded since readings began 22 years ago and sits well above the 100.0 mark, meaning the UK is expected to outperform its long-term historical growth trend
  • The Employment Index rose to 101.3, up from 99.4 the previous month. The index now stands at its highest level since August 2008 and above the crucial 100.0 mark for the first time since March 2011, signalling that UK job creation is likely to exceed trend growth over the coming months
  • The Inflation Index read 97.9 in January, its lowest level since November 2009 and down from 98.7 at the end of last year.

Labour Market Outlook

Labour Market Outlook: CIPD

  • Near-term employment prospects, which became positive in the first quarter of 2012, look set to remain positive into the third quarter
  • Private sector firms continue to drive much of the upturn in employment prospects, while the number of people employed in the public sector will continue to fall

Business Trends report

BDO Business Trends – May 2012

  • Inflation Index dropped by 0.1 points in April
  • Inflation Index at 102.9 – inflation is unlikely to reach the Bank of England’s 2.0% target by the end of the year
  • BDO’s Optimism Index – which predicts business performance two quarters ahead – fell from 96.7 in March to 96.2 in April
  • BDO’s Output Index – which points to business conditions in one quarter’s time – stagnated, moving up 0.1 to 95.8

Significant move towards economic growth?

BDO Monthly Business Trends Indices

  • Output Index reaches nine-month high, indicates growth for the first time since summer 2011
  • Business confidence for the second half of the year is more muted
  • Manufacturing Optimism Index indicates poorer prospects for the back end of 2012