The institute’s Business Confidence Monitor, produced in collaboration with Grant Thornton, indicates that the UK economy is forecast to grow by 1.5% in Q1 2014. The business confidence index stands at 37.2 points, up 5.5 points from the fourth quarter 2013. It is the sixth consecutive quarter that confidence in business has increased.
Business confidence was particularly high in the construction and banking, finance and insurance sectors, boosted by an increase in capital investment in the past year. The construction sector has had higher employee growth than the UK national average in the last twelve months and both sectors expect growth in the year ahead.
Stumbling blocks
However, despite positive signs there are stumbling blocks ahead as exports continue to flounder.
“We would like to see an increase in export guarantees to match the scale that German companies benefit from,” Michael Izza, chief executive of ICAEW, said.
“We need to continue to push to grow our exports, against a backdrop of a widening trade deficit, at the same time as ensuring that the momentum the UK economy has is maintained across all parts of the country.”
The ICAEW noted that recent GDP figures reflect an acceleration in UK economic recovery but that the Bank of England must look at broader measures such as capacity or investment growth, not just employment.
