Optimism grows as firms predict upturn in trading
BUSINESSES are growing more optimistic about the future, which in turn could see a boost to the jobs market.
A raft of reports on the outlook for companies in 2018 found that many expect trading conditions to be better than last year.
Businesses are more optimistic about the global economic outlook, with hiring intentions returning to near-record highs.
Manufacturers’ organisation the EEF said manufacturers believed a growing global economy would sustain new orders in the coming months, although many expected a deterioration in the UK.
Chief executive Stephen Phipson said: “Manufacturers left 2017 in an upbeat mood and are set to outpace the rest of the economy again this year as the growth in global trade continues to gain momentum.
“That is not to say everything in the 2018 garden is rosy, however, as there are plenty of factors that could puncture this positive picture.
“Chief amongst these is Brexit, which has put the investment outlook on a knife edge.
“As such, it is essential that the Government gets a transition deal as a matter of urgency and sets out with utmost clarity as to what kind of final deal it is looking for.
“In tandem with this, it also needs to crack on apace with its Industrial Strategy.
“This will be vital in providing manufacturers with the confidence to invest in strategies to improve their productivity and enter new markets,” added Mr Phipson.
Meanwhile, research by Lloyds Bank found that business confidence was “steady”, with investment and hiring intentions set to increase despite wider concerns about the economy.
A survey of 1,500 firms found that one in four cited weaker demand at home and abroad as being their biggest risk in the coming months.
Gareth Oakley, of Lloyds Banking Group, said: “Despite market uncertainty and global political turbulence, businesses are still upbeat.
“Many are looking to boost their investment and staff numbers, which is very encouraging, even though challenges remain in recruiting skilled labour.
“While the Brexit negotiations continue, businesses are focused on short-term threats, including managing higher costs and maintaining positive cash flow, so that they can prepare for whatever 2018 brings.”
A separate report by accountants BDO LLP said businesses were more optimistic about 2018, suggesting increased employment.
Spokesman Peter Hemington said: “UK businesses breathed a sigh of relief when progress towards Brexit was announced at the end of 2017 and business leaders are now more confident about the year ahead.”