UK directors caught in wave of optimism

UK business leaders are at their most optimistic for two years despite
weaker profits and falling performance levels, according to research for the
Institute of Directors.

The Institute of Directors’ Business Opinion Survey shows a sharp increase
in optimism during the first quarter of 2002, but also reveals slipping company
performance, falling profits and lower utilisation of capacity.

However, all the forward indicators have improved, particularly in terms of
export orders and predicted profits.

The study finds that the manufacturing industry continued to underperform
the general economy, but the gap is closing.

Ruth Lea, head of the policy unit at IoD, predicts that GDP should grow by
around 2 per cent this year and the private and public sectors are set for

"The improvement in export orders is encouraging as is the sign that
manufacturing may be picking up after what has been a nasty recession,"
she said.

The IoD warned employers to expect a hike in interest rates before the end
of June because of the healthier economic outlook and steady rises in house

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