The feel-good factor of UK firms has soared over the past three months, with businesses now far more optimistic about their future prospects than at any time last year, research from the Institute of Directors (IoD) has revealed.
The IoD’s latest quarterly report found that the balance of companies feeling optimistic about the year ahead stood at 38 per cent, up from 35 per cent three months ago.
The brightening economic picture has also resulted in an increase in investment confidence, with a balance of 26 per cent of businesses planning to invest in 2004, up from 18 per cent last quarter.
The figures are a dramatic improvement on last year’s optimism levels, when the Iraq war and the struggling UK economy resulted in a depressing balance of minus 28.
This latest survey supports previous studies which show that business confidence has improved greatly over recent months, with many companies predicting a profitable 2004.
Significantly, recruitment and output has also soared in the UK, even in the previously ailing manufacturing industry, suggesting that the downturn of the last two years is coming to an end.
Graeme Leach, chief economist at the IoD, said that the study gives cause for optimism.
“We believe there can be a successful re-balancing of the UK economy this year, with faster business investment growth and slower growth in household spending.
“The survey shows that business investment is set to accelerate, albeit at a slower rate than previous upturns,” he said.
