Business Productivity Growing As Result of Post-Election Stability
British entrepreneurs are investing more into growth as optimism remains “above the long-term trend”
The output levels of UK companies increased from 104.1 in July to 104.4 in the latest Business Trend Report by BDO LLP, demonstrating a growth in business activity.
According to the report, post-election stability has resulted in this increase in activity, with investment and focus on long-term growth also rising – especially for companies in the finance and property sectors who feared policy changes.
While outputs are rising, business optimism levels were down this month – from 103.9 to 103.2 – but remain above the long-term average.
The report indicated that this drop was due to the manufacturing sector’s reliability on exporting in unstable global markets.
Inflation levels also rose in this month’s index, up from 95.2 from 94.6; but cheaper business commodities, especially oil, kept business costs down and helped increase profits.
Peter Hemington, a partner at BDO LLP, provided a comment:
“Political certainty has bolstered short-term business confidence. The result is a thriving economy, despite global economic unrest.
“However, as the UK’s success continues to exceed other markets, the strong pound will make it harder for our exporters – particularly manufacturers – to find customers. We can’t let confidence tip over into complacency, so keeping Britain competitive should be a government priority.”