After a positive end to 2013, research has revealed that UK businesses are optimistic at the start of 2014. However, despite this increased confidence, business leaders remain realistic about the challenges ahead.
Almost nine out of 10 members of the Institute of Directors (IoD) expect UK GDP growth to be higher in 2014, according to a survey.
Of those questioned:
- 74 per cent expect higher revenue in 2014
- 58 per cent predict higher profitability
- 41 per cent are planning to increase staff.
James Sproule, chief economist at the IoD, said:
“It is the broadening of the base of the recovery that is going to be the best guarantor of continued economic expansion. In line with this desire for a more widely based recovery, the Government is clearly eager for business to start spending its accumulated reserves.”
The benefits associated with higher employment were echoed by Mark Beatson, chief economist at the CIPD. However, he warned that 2014 needs to be a year of productivity if wages are to rise faster than prices on a sustainable basis:
“Employment growth looks set to continue at an impressive rate over the year to come. However, the downside is that UK productivity has yet to improve and remains below its pre-recession level.”
Skills and training were a common theme throughout the New Year messages from the Confederation of British Industry and the Federation of Small Businesses. The leaders of both organisations agreed that a better skilled workforce is essential if businesses are to turn economic recovery into growth this year.
Elsewhere, the UK’s manufacturing and services sectors go into 2014 with a positive outlook, according to a survey by the British Chambers of Commerce. The survey of nearly 8,000 businesses found that most major Q4 2013 business health indicators were higher than pre-recession levels in 2007.