Business confidence rises

Latest data from the Institute of Directors (IoD) shows that business confidence in the UK economy took a significant leap forward in March. Bouncing back from the unexpectedly low confidence levels recorded in February, the key indicators suggest business leaders are returning to the more optimistic positions that they held in January.

The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, rose to -12 in March 2024, having dropped back to -25 in February from -14 in January.

Other indicators from March’s survey also showed increased optimism in the prospects for the UK economy:

• The index of business leader optimism for the future of their own organisation rose to +42 in March, up from +37 in February.
• Net investment intentions for the year ahead rose, from +13 in February to +18 in March.
• Net revenue expectations rose from +38 to +44.
• Net wages expectations reduced from +59 to +55.
  Businesses’ order books, last polled in September 2023 at +14, have returned to the position that they were in March 2023 (+28).

Dr. Roger Barker, Director of Policy at the Institute of Directors, said “Business confidence has bumped up and down during the last few months, struggling to assert a strong trend in either a positive or negative direction. However, March’s figures provide at least some grounds for greater economic optimism.

“Although it would be premature to claim that the economy has definitively turned the corner, as recently asserted by the Prime Minister, our latest poll figures do argue in favour of some emerging green shoots.

“Business leaders are anticipating higher revenue and investment levels over the next 12 months. Furthermore, although they remain on balance slightly pessimistic about the outlook for the economy as a whole, directors are much more hopeful concerning the prospects for their own organisations.”