The Brexit and Trump effect have not dented UK business optimism as manufacturing confidence has reached a 20-month high, according to the latest Business Trends Report by BDO LLP.
The latest report shows continuing signs of encouraging economic prospects for the UK over the coming six months, despite uncertainty following the US Presidential Election and the UK’s decision to leave the European Union.
BDO’s Optimism Index, which indicates how firms expect their order books to develop in the coming six months, continues to rise and now sits at 103.7 from 102.2 in December, above its long-term trend.
The Optimism sub-indices for both manufacturing and services are also higher this month, dismissing claims that the UK has a two-speed economy. Manufacturing’s sub-index has risen to 102.2 from 99.4, passing the 100 mark, which indicates growth, for the first time since June 2015. The Services Optimism sub-index has also increased from 102.7 to 103.9 this month, a 14-month high.
Commenting on the findings, Andrea Bishop, Lead Partner, BDO LLP, Bristol said:
“The UK economy seems to be remarkably resilient. British businesses are surprisingly confident about the short-term, encouraged by the opportunities our cheaper currency and a better-performing global economy have created. These have provided a much-needed short-term boost for our economy, particularly our manufacturers.
“However, government still has much to do in these uncertain times if the UK is going to stay on the right economic track.
“The modern industrial strategy could be a step in the right direction. More importantly, simplifying regulation and taxes, and improving our education and training systems are high priorities for businesses in the new economy. And with government borrowing costs still close to all-time lows, the opportunity to replace our worn out infrastructure is still an enticing one.”