From a high in June-July, the IoD Directors’ Economic Confidence Index has taken a tumble in September, back to levels last seen in February 2021.
- The Index, which measures the net positive level of optimism in the UK economy amongst directors, recorded a value of just under zero (-1%) in September 2021, down from +22% in July 2021.
- The last time an Index score of close to zero was recorded was in early February, at the height of the third lockdown.
- 75% of IoD members expected their costs to be higher in the next 12 months compared to the last 12 months. 57% expected their revenues to be higher.
Kitty Ussher, Chief Economist at the Institute of Directors, said:
“The business environment has deteriorated dramatically in recent weeks. Following a period of optimism in the early summer, people running small and medium sized businesses across the UK are now far less certain about the overall economic situation and the IoD Directors’ Economic Confidence Index fell off a cliff in September.
“A higher proportion of our members expect costs to rise in the next year than expect revenues to rise. This is not helped by the government’s recent decision to raise employers’ national insurance contributions, which acts as a disincentive to hire just when the furlough scheme is ending.”