Confidence continues to grow, says BDO

BUSINESS confidence continued to improve last month according to the latest research from accountancy firm BDO.

Its monthly Business Trends report said this suggested the economic recovery could gather pace in the early part of 2014.

BDO’s Optimism Index, which predicts business performance two quarters ahead, increased by one point to 101.7 in October.

During the year it passed the 95 mark which indicates growth and is now at a three-year high.

Optimism in the services sector, which accounts for over three-quarters of the economy, rose to 99.9 in October from 99.2 in September and optimism among manufacturers was up by 2.6 points to 109.6.

BDO said a rise in its Output Index, which predicts short-run turnover expectations, has been driven by an increase in new export orders from the eurozone. Its Employment Index continued to trail the broader economic recovery, rising modestly from 97.5 in September to 98.1 in October.

Tim Entwistle, partner and head of BDO in the North West, said: “With broad-based recovery now a reality, the Chancellor has room for manoeuvre as he looks towards the Autumn Statement.

“Recent measures have prompted recovery on the demand side of the economy, but the Chancellor risks bottlenecking growth unless he turns his attention to unlocking the supply side. As public sector finances improve, there is flexibility to increase investment in areas such as house building, along with the additional benefit of giving the construction industry a much-needed boost.”