Businesses optimistic about future growth, according to BDO Index
A report from accountancy and business advisory firm BDO LLP has shown that businesses in the UK continue to be optimistic about their future growth, despite a drop in business output.
BDO’s Output Index showed that UK business output dropped from 100.05 in March to 99.97 last month, which was below the long-term growth trend of 100. However, the company’s Optimism Index found that businesses continued to feel confident about their financial prospects.
BDO’s Optimism Index showed how businesses expect output to develop over the next three to six months, with respondents feeling more confident last month compared with the previous month. April’s optimism level stood at 102.49, up from 102.26 in March.
The increase suggests that despite issues such as geopolitical uncertainty, a slowing Eurozone and GDPR-related compliance costs, businesses are still feeling confident about their future. Household finances are stronger, resulting in demand for businesses’ products and a boost in positivity.
Businesses were also found to be feeling optimistic about employment, with BDO’s Employment Index showing that more businesses are planning to boost their headcount over the next six months.
The index showed that hiring intentions increased for the fifth month running and reached a record high of 112.29, suggesting that the strength in the UK labour market could continue, which is a positive sign for the UK economy.
Commenting on the index, Martin Gill, Lead Partner of BDO LLP in Scotland, said: “The optimism of both the manufacturing and services sectors is encouraging for the health of the Scottish and UK economy in the face of underwhelming business output.”