By Daniel Hunter
New data published today reveals that UK businesses are unruffled by the prospect of an upcoming election, despite the current high profile debate around businesses’ confidence in political parties.
According to BDO’s Business Trends report, business optimism and output still remain high despite the most unpredictable election in a generation only three months away.
Both the BDO Output and Optimism Indices, predicting economic growth three and six months ahead respectively, remain resolutely positive. The BDO Optimism Index maintained a robust reading at 104.4 and the BDO Output Index continued positively at 102.9, both well above the 100 mark representing expansion above the long-term trend rate.
Companies’ hiring intentions also remain positive. The BDO Employment Index, measuring expected employment growth, remained well above its long term trend at 111.6, signalling that firms expect businesses to keep hiring in the near term.
Continued low oil prices, low inflation, strengthening wage growth and the potential for increased consumer spending have created an economic thaw for the UK economy. Confidence is particularly evident in the UK’s manufacturing sector which — responding positively to low input prices — maintained a balmy economic outlook.
Commenting on the findings, Peter Hemington, Partner, BDO LLP, said: “This month’s Business Trends report shows that businesses can and will tune out of the parties’ electioneering to focus on what really matters — their business prospects. By discounting the political noise and taking a realistic view of the economy’s strengths, businesses are remaining cautiously optimistic.
“Businesses are worried less about the detail of which candidate will get the keys to Number Ten and more about the country’s long-term economic prospects. And in the meantime they are focusing on their own businesses and keeping rightly positive.”