Business confidence reaches two-year high, according to ICAEW

The latest Business Confidence Monitor (BCM) from the Institute of Chartered Accountants in England and Wales (ICAEW) has shown that business confidence in the UK has reached its highest level in two years.

The BCM surveyed more than 1,000 chartered accountants between January and April 2018 and found that confidence increased to 7 points in the second quarter of the year, up from -1 in the first quarter, whilst optimism amongst companies that are exporting also increased.

Challenges

The BCM also revealed the biggest challenges for businesses, with General Data Protection Regulations and gender pay being cited as the main concerns, whilst businesses are also facing difficulties as a result of talent shortages. However, businesses that are exporting remain confident, with companies reporting a 5.2% increase in sales in Q1.

Confidence was found to be higher in businesses that are exporting, with the monitor showing a confidence level of 12.4, compared to 1.7 for companies that are relying on domestic sales.

ICAEW’s research coincides with the latest optimism index from accountancy and business advisory firm BDO, which showed a month-on-month increase in optimism, despite a drop in business output.

Improving

Commenting on the rise in confidence amongst UK businesses, ICAEW Chief Executive Michael Izza said: “There is definitely a sense of ‘the joy of spring’ in this quarter’s figures with confidence rising across most regions and sectors. Export and domestic sales growth are both improving and businesses are controlling price inflation and labour costs.”