Decline in business optimism continues

Optimism among UK businesses has fallen sharply over the past three months.

Business leaders interviewed by the Institute of Directors (IoD) reported a marked negativity in contrast to a similar study earlier in the year.

The latest survey shows that the balance of those directors who are more optimistic about their company’s prospects, compared with three months ago, has fallen from 37% to 23% .

Overall business optimism has halved over the past year.

Miles Templeman, director general of the IoD, said: “These latest figures, although only a snapshot of IoD members, are a concern.

“They suggest that, in line with other recent statistics, the UK economy has peaked in the latest cycle. In other words, current GDP growth is as good as it gets.”

The crisis in manufacturing appears to be worsening, with the survey revealing an optimism balance of 3%, down from 21%.

Company performance has  slipped in the latest survey, down 14%, while profits expectations and investment intentions have also weakened.

Earlier in the week the IoD called for both politicians and business leaders to take more risks.

“Whether in Number 10 Downing Street or in the nation’s boardrooms, the mark of a leader is a willingness to take risks in the pursuit of achievements, to boldly go where the organisation may not see the need to go,” Templeman said.

“The competitiveness of the nation depends upon leaders being prepared to risk failure in the pursuit of success.”

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