UK business confidence improving

Business Trends: BDO

  • Business conditions continued to improve in September, as the Output Index increased to 99.5, up from 98.3 the previous month. The last time the index was higher was in July 2010.
  • The Optimism Index reached 100.7 in September, up from 98.0 in August. This level of confidence has not been seen mid-2010
  • Overall inflation expectations for business input prices continued to come down
  • Hiring expectations improved modestly

Optimism among UK businesses has fallen to a 20-year low

Business Trends report: BDO LLP

  • BDO’s Optimism Index, which predicts business performance two quarters ahead, suggests the economy will continue to contract at the start of 2013.  The index fell to 89.1 in August from 93.1 in July.  This is the sixth consecutive month that the data has registered a drop, with a four-point plunge from 93.1 in July.  Business confidence is now at its lowest level since the Business Trends indices began in 1992, and significantly below the crucial 95 mark which would indicate a return to growth.
  • BDO’s Output Index – which predicts short-run turnover expectations – has also fallen sharply, from to 90.8 in August from 93.9 in July, reaching its lowest point for 40 months.
  • BDO’s Employment Index fell to 92.1 in August
  • Conditions for UK job seekers are unlikely to improve before the end of the year

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