The confidence levels of UK businesses are slowly starting to rise after three years of political uncertainty – though investment caution remains.
The resounding majority delivered to Boris Johnson in the general election caused a sharp increase in directors’ confidence in both their own firms and the economy at large.
The Institue of Directors reported that confidence in the economy for December 2020 grew from negative 18% in November to positive 21%, whilst organisational confidence rose by over 20 percentage points to 46%.
Much of the new-found confidence is derived by the election promise from Johnson to take the UK out of the European Union by the end of January, bringing an end of over three years of uncertainty for businesses of all sizes – as well as costly preparations and planning.
The service sector, in particular, saw an increase in activity at the end of 2019 with the IHS Markit/CIPS UK purchasing managers’ index for services rising 0.7 points to 50, indicating activity increases for the majority of companies.
Economics associate director at IHS Markit, Tim Moore, commented to the Financial Times that: “The modest rebound in new work provides another signal that business conditions should begin to improve in the coming months, helped by a boost to business sentiment from greater Brexit clarity and a more predictable political landscape.”
With the UK’s departure from the EU just three weeks away, it’s now or never for businesses to ensure they’re prepared. If your company is yet to make concrete strategic plans to manage any disruption, including additional shipping paperwork or regulation changes, find out more about Go Exporting’s Brexit consultancy here.