Global business expectations have improved dramatically over the last five months, according to a new study. In particular, the expectations of UK businesses for economic activity have risen by a net balance of more than 20%.
The economic outlook of the UK still seems uncertain at present. The cumulative toll of the Brexit process, the pandemic, and the hyper-inflation of the last year, have all seen business positivity decline, with many leaders anticipating difficult times ahead. For the first time in a while, however, a growing number of experts seem to believe there is light at the end of the tunnel.
A new study from Accenture and S&P Global suggests that UK bosses – and their global counterparts – believe the future may be brighter than previously anticipated. Researchers polled 12,000 businesses around the world, including 1,400 across Britain, and found that business confidence now stands at its highest level in 12 months.
On a global level, around 16% of businesses told analysts they expected activity such as revenues to rise in October 2022. In February 2023, though, this had risen to roughly one-third of respondents. The countries which were most upbeat on this front were Ireland and the UK – both which saw more than 40% of respondents anticipate positive activity.
While UK businesses are still slightly less optimistic than their Irish equivalents, they exhibited a far greater net-change in positivity. This saw their headline index rebound from a record low of 18% in October, to 43% as of February.
Commenting on the findings, Matt Prebble, Strategy & Consulting & Lead for Accenture in the UK & Ireland, said, “The renewed optimism among UK businesses once again demonstrates their resilience in the face of economic uncertainty. To build on this and continue to grow, firms must adopt a strategy of continuous reinvention that will enable them to adapt to future challenges. With this mindset, they can lay the foundation for long-term success.”
The findings also showed that UK companies were more confident than almost all of their European peers. UK levels of optimism were nearly double the average seen in the Eurozone – around 23% – with the bloc’s largest economies of France and Germany particularly reserved. Positivity in both markets’ indexes remained below 20%. This does not mean that UK businesses have no worries at all, though.
Prebble continued, “With employment levels expected to increase, wage inflation understandably remains a concern for many firms. Businesses should therefore be empowering employees to focus on higher value activities that fuel productivity through the use of technology, helping to drive growth as the economy rebounds.”
The study comes shortly after another poll by Eden McCallum found that British business leaders were, on some levels, the most optimistic in Europe. While bosses in the UK told that survey that they were pessimistic about the national economy, most still believed their own firm had a bright outlook – and one-fifth even suggesting they were ‘very optimistic’.