The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, remained subdued at -25 in October 2023, similar to September’s reading of -26. This is the fifth consecutive month in which economic confidence has been relatively low, following a large drop in June.
However, there were some more encouraging signs in other indicators from October’s survey, the index of business leader optimism for the future of their own organisation rose to +37 in October, up from +33 in September. There was also a noticeable jump in net revenue expectations, up to +46 in October compared to +38 in September.
Net investment expectations also rose, to +23 in October from +13 in September whilst the longer-term growth ambitions for business are more favourable than it was this time last year, with 69% of business leaders stating that they have plans for growth compared to only 62% a year ago.
Dr. Roger Barker, Director of Policy at the Institute of Directors, said “On the face of it, business confidence is pretty much unchanged from last month. Business leaders appear to be stuck in a moderately pessimistic mood in terms of their outlook for the economy.
“However, under the surface, there are some encouraging signs. Some businesses are becoming more sanguine about the prospects for their own organisations, both in terms of revenue and investment intentions.
“Whether these green shoots consolidate into a definite trend will probably only come clear after the Autumn Statement later this month – when the government will provide us with a clearer picture of its pre-election tax and spending intentions.”