Confidence at three-year high says BDO
BUSINESS confidence is continuing to grow and has reached its highest level since April 2010, according to the latest Business Trends report by accountancy firm BDO.
BDO’s Optimism Index, which predicts business performance in two quarters’ time, increased for the eighth consecutive month – from 98 in August to 100.7 in September – its highest level since the Coalition Government was formed.
The figure has risen beyond the 100 mark, the level at which the economy is expected to achieve its long-run average trend growth rate over the coming six months. BDO said this suggested that economic growth will pick up speed in the next two quarters.
Optimism in the services sector, which accounts for over three-quarters of the economy, climbed from 97.7 in August to 99.2 in September, while the manufacturing sub-index jumped to 107, up from 99.6 last month.
BDO’s Output Index, which predicts short-run turnover expectations, also continued its upward trend, reaching a 30-month high of 99.5 in September, up from 98.3 in August. The sub-indices for both the manufacturing and services sectors, which collectively cover the overwhelming majority of UK GDP, showed strong improvement.
Tim Entwistle, partner and head of BDO in the North West, said: “With the recovery firmly established across the services and manufacturing sectors, it’s encouraging to see the economy gearing up for a strong finish to 2013.
“On our doorstep, we are seeing sluggish Eurozone recovery which could compromise the resurgence and across the pond US legislators are at a political impasse over the Federal Budget. However, we think that policymakers should be happy that we seem, perhaps later than necessary, to be seeing the return of growth.”
