Business confidence on the rise, says BDO

BUSINESS confidence is at its highest point since May 2012, according to the latest Business Trends report by accountancy group BDO.

BDO’s Optimism Index, which predicts business performance two quarters ahead, moved up for the fourth consecutive month, to 93.6 in May from 93 in April.

The Output Index, which predicts short-run turnover expectations, also improved in May to an 11-month high of 94.4. But both indices remain below the 95 mark that indicates growth. The Employment Index, which measures recruitment hopes for the next two quarters, rose to 96.6 in May, the index’s highest since August 2011.

However, in spite of these improvements, inflationary expectations rose again in May, as the BDO Inflation Index climbed to 104.2 from a previous reading of 103.4. This is the highest reading for the Index since January 2012.

Tim Entwistle, partner and head of BDO in the North West, said: “It’s encouraging to see that business confidence has continued its upward trend, and that businesses have retained their healthy hiring intentions for a fifth consecutive month.

“However the Government must do more to achieve the robust economic growth that remains tantalisingly out of reach. The Government must look to ensure more funds are reaching businesses through lending, in order to help them drive our economic recovery.”