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IoD: Directors’ confidence hits record high

24 Jun 2021

Business optimism is at its highest since the IoD began recording its members confidence in July 2016, the Institute's latest Confidence Tracker reveals. 

  • Directors’ optimism in the economy is at its highest since just after the 2016 Brexit referendum; it moved further into positive territory over Q2 (+27 in June, up from +14 at end of Q1)
  • Business leaders’ confidence in the 12-month outlook for their own organisation also rose to a joint record high of +50 in June after ending Q1 at +41
  • Net expectations for higher costs (+55) and wages (+46) rose to their highest since the pandemic began, meanwhile investment and hiring intentions for the year ahead picked-up (+26)
  • After COVID-19 and the economy, 39% of directors also reported skills shortages as among the top current issues negatively impacting their business

Responding to the latest Confidence Tracker, Tej Parikh, Chief Economist at the Institute of Directors, said:

"After a turbulent period of battling to keep businesses afloat, directors are now raring to go.

"With most of the economy now reopen firms are brimming with optimism for the year ahead, despite the recent delay to the roadmap. Business leaders finally have some clarity to rev up their hiring and investment plans now that the worst of the pandemic and Brexit uncertainty appears to be in the rear-view mirror. Government support has also helped buoy cash-strapped businesses.

"Directors are eager to rebuild their workforces to meet pent-up demand as new-found confidence has seen consumers reaching for their wallets. Meanwhile, firms are also looking to rescale and adapt by updating their kit through new investments in capital and technology.

"The bounce-back in economic activity is however not without its challenges. Debt, repayments, and supply chain bottlenecks are putting pressure on firms to raise prices. Many businesses are also struggling to fill vacancies with the pandemic and Brexit making certain skills harder to find.

"The delay to a full reopening highlights how policymakers and directors should not be lulled into a false sense of security. The Government must look to extend cashflow support in line with delays to the roadmap, particularly for the retail and hospitality sectors. Businesses meanwhile should continue to invest in their skills and digital capabilities to adjust and build their resilience."

 Full survey results

651 respondents, conducted between 2nd-21st June 2021.

Net percent balances are calculated as respondents reporting an increase minus a decrease in each variable

How optimistic are you about both the wider UK economy and your organisation over the next 12 months?


Very optimistic

Quite optimistic

Neither optimistic nor pessimistic

Quite pessimistic

Very pessimistic

Net

Wider UK economy

11%

43%

19%

20%

7%

27%

Your organisation

15%

46%

27%

8%

3%

50%


Comparing the next 12 months with the last 12 months, what do you believe the outlook for your organisation will be in terms of: 
 



Much higher

Somewhat higher

No change

Somewhat lower

Much lower

Net

Revenue

14%

50%

19%

13%

4%

47%

Cost

9%

56%

26%

8%

1%

55%

Business investment

6%

33%

47%

9%

3%

26%

Employment

3%

33%

52%

8%

2%

26%

Employee wages

4%

48%

41%

5%

1%

46%


Which of the following factors, if any, are having a negative impact on your organisation?


Coronavirus outbreak

55%

UK economic conditions

40%

Compliance with Government regulation

40%

Skills shortages/employee skills gaps

39%

New trading relationship with the EU

36%

Global economic conditions

33%

Business taxes

30%

Employment taxes

29%

Broadband cost/speed/reliability

25%

Transport cost/speed/reliability

22%

Difficulty or delays obtaining payment from customers

18%

Cost of energy

16%

Coronavirus Hub - IoD

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