Directors’ economic confidence rises

Feb 2, 2023

Business leaders' confidence in the economy rose significantly in January, according to the Institute of Directors (IoD).

While the IoD's Directors' economic confidence index hit a low of -58 in December 2022, the beginning of 2023 saw business leader optimism in the economy increase to -28 - the highest level recorded since March last year.

Directors' confidence in their own companies' prospects also increased from +24 in December to +37 in January.

According to the IoD's chief economist Kitty Ussher, the increase in economic confidence can be attributed to improved political stability and reduced concerns about inflation.

However, while 24% of directors believe that inflation has already peaked - up from 10% in December - 40% do not expect it to peak until this summer.

Furthermore, expectations in terms of revenue, cost and investment intentions for the next year remained relatively low. While 27% of IoD members plan to increase investment in the next year, 25% plan to decrease it.

Commenting on the figures, Ussher said:

"The Government needs to do more to sharpen investment incentives in capital, people and net zero in the forthcoming Budget to get our economy back on to a firm path towards growth."

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