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Growing Confidence for 2013?

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.

Economic outlook: 

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.

Triple Dip?

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.

Fiscal Policy

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.”

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