UK businesses feeling confident about performance, report shows

The latest Business Trends Report by accountancy and business advisory firm BDO LLP has shown that businesses in the UK are feeling confident about their performance over the next six months, despite a drop in output growth.

BDO’s Optimism Index showed what businesses expect in terms of output development over the next six months, with optimism hitting 101.85 in June, up from 101.74 in May and higher than the long-term trend.

Record high 

The report also showed that businesses are feeling positive about their recruitment plans, with BDO’s Employment Index reaching a record high. This comes after the UK’s unemployment rate reached a record low of 4.2%.

The index’s figures suggest that firms remain resilient despite uncertainties over the economy. However, productivity still remains an issue, with business output dropping from 98.58 in May to 97.29 last month.

Real achievement

Commenting on employment reaching a record high, BDO LLP’s Lead Partner in Scotland Martin Gill described it as a real achievement for the economy during this turbulent time.

He acknowledged the action that is being taken to tackle the UK’s productivity issues, stating that the UK government’s concerted effort to increase annual productivity growth to 3% is a step in the right direction, but said that more needs to be done in order for this target to be reached.

He added that boosting the annual investment allowance would encourage businesses to increase their investment in infrastructure, technology and training and would help to solve the UK’s productivity puzzle.