Business leaders confident about UK economy

New research reveals there is growing optimism among business leaders about what the future holds for their companies and the wider UK economy.

A survey by the Institute of Directors (IoD) found that 62% of its members think the outlook for the economy is now brighter than at any stage since the financial crisis of 2008, while 59% have high confidence about their firm's performance over the coming year.

Over 1,000 directors were polled, of which the average confidence rating for the next 12 months was 6.7 on a scale of 1 to 10 - up from the 6.3 figure recorded in the first quarter of 2013.

But despite this renewed level of confidence, 39% of members expect the economy to grow less than the 1.8% forecast for 2014 by the Office for Budget Responsibility.

In terms of business investment, the proportion of business leaders expecting their investment to be higher in 2013 than 2012 exceeds those expecting it to be lower by 23%.

IoD Chief Economist Graeme Leach hopes the increased optimism becomes a reality, sparking plans for business investment and recruitment over the coming months.

"Just as the weather gets hotter the economy seems to be warming up as well," he said. "Business leaders clearly believe that the UK economic outlook is improving and they are even more optimistic about the outlook for their own companies."

The poll also shows widespread support for the Government's fiscal plans, with 54% of members claiming that the current approach on deficit reduction is correct.

There is some criticism, however, with 29% stating that more should be done to help reduce the deficit.

Some 74% support the decisions announced at the recent spending review, with 84% endorsing the 1% cap on pay rises for public sector workers.

On the other hand, 56% think that the Government is not investing enough in key infrastructure, highlighting roads, airports and railways as priorities for investment.

"IoD members recognise the political realities but a significant minority would like to see the Chancellor going further and faster on deficit reduction," added Mr Leach.

"The exception to this view is key infrastructure spending, where business leaders are shouting out for more not less money, financed preferably from lower public spending elsewhere".

Copyright Press Association 2013