Credit, Collections & Insolvency News
New research from the Institute of Directors (IOD) has suggested that business optimism is at its highest since the IoD began recording its member’s confidence in July 2016.
Directors’ optimism in the economy is at its highest since just after the 2016 Brexit referendum; it moved further into positive territory over Q2 (+27 in June, up from +14 at end of Q1)
Business leaders’ confidence in the 12-month outlook for their own organisation also rose to a joint record high of +50 in June after ending Q1 at +41 with net expectations for higher costs (+55) and wages (+46) rose to their highest since the pandemic began, meanwhile investment and hiring intentions for the year ahead picked-up (+26)
After Covid-19 and the economy, 39% of directors also reported skills shortages as among the top current issues negatively impacting their business
Responding to the latest Confidence Tracker, Tej Parikh, Chief Economist at the Institute of Directors, said “After a turbulent period of battling to keep businesses afloat, directors are now raring to go.”
“With most of the economy now reopen firms are brimming with optimism for the year ahead, despite the recent delay to the roadmap. Business leaders finally have some clarity to rev up their hiring and investment plans now that the worst of the pandemic and Brexit uncertainty appears to be in the rear-view mirror. Government support has also helped buoy cash-strapped businesses.”
“Directors are eager to rebuild their workforces to meet pent-up demand as new-found confidence has seen consumers reaching for their wallets. Meanwhile, firms are also looking to rescale and adapt by updating their kit through new investments in capital and technology.”
“The bounce-back in economic activity is however not without its challenges. Debt, repayments, and supply chain bottlenecks are putting pressure on firms to raise prices. Many businesses are also struggling to fill vacancies with the pandemic and Brexit making certain skills harder to find.”
“The delay to a full reopening highlights how policymakers and directors should not be lulled into a false sense of security. The Government must look to extend cashflow support in line with delays to the roadmap, particularly for the retail and hospitality sectors. Businesses meanwhile should continue to invest in their skills and digital capabilities to adjust and build their resilience.”