UK businesses 'more confident than at any point since the middle of 2010'

A survey of chartered accountants shows that while businesses are as confident as they have been in over three years as the economy continues its revival there remains cause for concern.

The ICAEW/Grant Thornton UK business confidence monitor index is now at +24, a rise of 7.3 on the second quarter and the best score since quarter two in 2010.

The index has predicted the economy will increase by 1% in the ongoing quarter courtesy of increases in turnover, profits and jobs. However, there are worries over investment.

The confidence coincides with recent figures that point to a more positive outlook for the construction and manufacturing sectors, raising hopes the economy can continue to grow in 2013.

Companies anticipate turnover to increase by 4.9% and profits to go up by 4.6% over the next 12 months, according to the poll on behalf of accountancy body ICAEW and Grant Thornton.

Businesses expect to expand their workforce by 1.6% in that time, with pay set to increase by 1.8%.

ICAEW chief executive Michael Izza has encouraged firms to take advantage of a positive environment to make sure the recovery continues.

"Currently, decisions such as where to invest are being made on a short-term basis which explains why the strong figures for this quarter are being led by improvements in the housing sector and increased consumption by households," he said.

"To get a stronger commitment from companies, and to ensure a broad-based recovery has solid foundations, the Government must continue to ensure the business environment remains conducive to growth."

Grant Thornton UK LLP CEO Scott Barnes said the business environment is beginning to look a lot steadier than in quarters gone by, with companies having the confidence to create jobs. However, he has urged caution.

"There is still cause to be concerned. Annual capital investment growth has fallen this quarter and the hopes of an investment-led recovery do not look to be materialising as investment expectations also cool," he said.

"Couple this with modest export figures and it becomes clear that the economic recovery is balanced on knife-edge."

Copyright Press Association 2013