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IoD: Directors’ confidence in the economy “falls off a cliff” in September

30 Sep 2021

From a high in June-July, the IoD Directors’ Economic Confidence Index has taken a tumble in September, back to levels last seen in February 2021.

  • The Index, which measures the net positive level of optimism in the UK economy amongst directors, recorded a value of just under zero (-1%) in September 2021, down from +22% in July 2021.
  • The last time an Index score of close to zero was recorded was in early February, at the height of the third lockdown. 
  • 75% of IoD members expected their costs to be higher in the next 12 months compared to the last 12 months. 57% expected their revenues to be higher. 

Kitty Ussher, Chief Economist at the Institute of Directors, said: 

“The business environment has deteriorated dramatically in recent weeks. Following a period of optimism in the early summer, people running small and medium sized businesses across the UK are now far less certain about the overall economic situation and the IoD Directors’ Economic Confidence Index fell off a cliff in September.   

“A higher proportion of our members expect costs to rise in the next year than expect revenues to rise. This is not helped by the government’s recent decision to raise employers’ national insurance contributions, which acts as a disincentive to hire just when the furlough scheme is ending.”

The Institute of Directors is today relaunching its Directors’ Economic Confidence Index that measures the net positive answers from its members to the question ‘How optimistic are you about the wider UK economy over the next 12 months?’ on a five-point scale from ‘very optimistic’ to ‘very pessimistic’.   
 
The back series, including graph, is available from July 2016 here.  Going forwards, new data points will be made available on the first day of each month containing data obtained from a survey of IoD members that is in the field between 13th-27th of the previous month.   
 

Full survey results 

635 respondents, conducted between 13th-27th September 2021. 

How optimistic are you about the wider UK economy over the next 12 months?

Very optimistic

Quite optimistic

Neither optimistic nor pessimistic

Quite pessimistic

Very pessimistic

Index*

Wider UK economy

5%

33%

23%

28%

11%

-1%

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

Don't know

Revenue

12%

46%

20%

15%

6%

1%

Cost

16%

59%

18%

6%

0%

1%

Business investment

7%

25%

47%

13%

5%

2%

Employment

3%

27%

52%

13%

4%

1%

Employee wages

5%

56%

32%

5%

1%

1%

 

* The Index is a calculation of ‘% optimistic - % pessimistic’ 

Contact Press office

Hugo Legh, Media and Communications Lead

0208 078 4138


Press office

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