Business leaders’ confidence in their own firms remains robust as they look ahead to 2018, even against a backdrop of concerns about the wider UK economy, a new survey of 762 company directors reveals. The poll by the Institute of Directors shows that in December almost half of businesses were feeling ‘quite’ or ‘very optimistic’ about their own prospects but a similar number said they are feeling pessimistic when asked about the wider economy.
Half of the Institute’s members, predominantly drawn from small and mid-sized businesses, cited domestic economic conditions as the leading negative factor for their business, while around 4 in 10 said uncertainty surrounding the UK’s trading status with the EU and skills shortages was having a detrimental effect.
At the top of the New Year’s wish-list for domestic reform is investment in both physical and digital infrastructure, alongside reducing the regulatory burden for businesses. More than a third of IoD members want funding to improve existing transport infrastructure, closely followed by support for better coverage of faster broadband and simplifying red tape.
Stephen Martin, Director General of the Institute of Directors, said:
“Everyone wants to end the year on a positive note, and it is welcome to see that directors are cautiously optimistic for their own businesses. We have seen progress in recent weeks in the Brexit talks, and overall the economy has beaten the more negative predictions for 2017. Our members will be looking ahead to 2018 determined to ensure their companies continue to thrive.
“The concern in these figures is the prevailing low expectations for the performance of the economy as a whole. Domestic economic conditions and uncertainty around our trading relationship with the EU continue to top our members’ concerns. The Government must now build on the resilience of business leaders. It can help to bolster confidence by hitting the ground running in January, pushing ahead with the priorities spelled out in its Industrial Strategy in areas like transport and skills.
“It is also absolutely vital that quick progress is made in agreeing transitional arrangements with the EU for what comes after March 2019. Businesses need to plan ahead, so the Government must deliver greater certainty on the Brexit transition early in the new year.
“The next few months are a critical time for this Government and for businesses up and down this country. Getting the business environment right by investing in infrastructure and serious engagement with companies on the future trading relationship with the EU must remain top of the agenda.”