Business confidence has reached a 14-month high in the North West, new research from BDO has revealed and as reported in today’s EN for Business.
Short-term UK business prospects have continued to improve this month and reached the highest level since May 2011, according to the latest Business Trends report by accountants and business advisers BDO LLP.
BDO’s Optimism Index, which predicts business confidence in two quarters time, went from 94.3 in June to 95.6 in July. And its latest Output Index, which predicts short-run turnover expectations, hit 96.8 in July, up from 94.9. It was the fifth month in a row that the index had surpassed the 95.0 mark which indicates growth.
Tim Entwistle, partner and head of BDO in the North West, said,
“It’s encouraging to see short-term business prospects improving and confidence in our economy continuing to strengthen.
“Indeed, all of our indices moved in the right direction this month, suggesting that the new Bank of England governor Mark Carney has joined at an opportune time.”
Elsewhere, output in the services sector, which makes up around three quarters of the economy, increased going from 94.7 in June, to 96.5 in July, while the manufacturing sector reached 98.3, up from 95.7 the previous month.
It appears rising confidence is having an impact on businesses’ employment intentions as BDO’s Employment Index continued to move upwards going from 96.7 in June to 97.0 in July.
The accountant and business advisers Inflation Index also moved in the right direction, with overall inflation expectations decreasing to 102.2 in July, down from 103.4 in June, thus easing financial pressures on businesses.
Entwistle concluded, “Carney’s decision to peg interest rates to unemployment levels is a positive step, although I expect the new governor would have preferred a target of 6.5 per cent.
“Conservative members of the council are likely to have felt that mirroring the US Federal Reserve was a step too far, with the modest target of seven per cent representing a compromise.”
Source: Kirsty Hewitt – ENforBusiness