2013 is looking bright – at least according to a new opinion poll of key business leaders taken by the Institute of Directors. A growing sense of economic optimism is emerging across the board, from the prospects of a triple dip recession to fiscal policy from the government.
Those business directors interviewed are starting the year with far more optimism than 2012. The proportion who expect 2013 to be brighter than last year exceed those with a pessimistic outlook by a margin of 31%, showing growing confidence in the prospects of UK businesses as well as the economy in general. This is a great turn around from last year, where it was an exact reversal – 31% more directors were pessimistic about prospects than those who were optimistic.
In the longer term, confidence has also risen; 22% more directors are expecting a higher UK GDP growth over the next ten years as opposed to the previous decade. This is a 9% improvement on Q1, an 8% improvement on Q2 and a 10% improvement in Q3.
With the double dip recession in recent memory, the threat of a triple dip is definitely looming in some people’s minds. However, according to the survey, the probability of this coming true has fallen – 16% thought the risk was high, 49% moderate and 34% low. At the start of 2012, the same question was thought more likely across the board, with 35% believing it was high risk. While there’s still a feeling that the triple dip could be a grim reality, the proportion believing it to be high risk has fallen to 1 in 6.
On the fiscal policy front, something that impacts hugely on business confidence, support for deficit reduction and confidence in the Chancellor himself remains strong at +11%, though this is a huge drop from +54% at the time of the April 2011 Budget.
Overall, as the Chief Economist for the Institute of Directors puts it; “2012 was a tough year, but business leaders expect 2013 to be much better. The risk of a return to recession and a triple dip has not gone away, but it is receding fast, and expectations of growth are rising.”