IoD press release Business leaders remain cautious on the outlook for the year ahead

This nonetheless represents the fourth lowest reading of the index since its introduction in July 2016.

Business leader confidence in their own organisations also rose to +8 in December, from -7 in November. However, this is still the second lowest reading of this indicator since June 2020.

There was a corresponding improvement in the underlying indicators, but they still sit well post-pandemic trend levels:

• Investment intentions rose to 0 in December, up from -20 in November.
• Headcount expectations rose to -1, from -24 in November.
• Export intentions rose to +6, up from +2 in November.
• Revenue expectations rose to +19, from +4 in November.

Anna Leach, Chief Economist at the Institute of Directors, said:

“IoD members remained cautious on the outlook for the year ahead when we surveyed them over the festive period. Although it was positive to see improvements in all our forward-looking economic measures, they remain substantially below the averages for the first half of 2024 as forthcoming tax increases loom large.

“It is welcome to hear of government commitments to stable and long-term policy making that facilitates business planning and investment. But it takes more than stability to deliver growth and government rhetoric on investment is increasingly out-of-step with business reality. Our data shows that business leaders are proceeding with investment in areas such as technology, workforce training and R&D, motivated by desires to increase efficiency, launch new products and services, and expand their businesses. But profit uncertainty is the greatest constraint they cite and almost a quarter of business leaders are planning to make no investments this year. The government must move swiftly to deliver a policy environment in the UK that strengthens investment, with Industrial Strategy, 10 year infrastructure plans and planning reform presenting material opportunities.”

The IoD Directors’ Economic Confidence Index measures the net % positive answers from members of the Institute of Directors 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’.

Full Results

497 responses from across the UK, conducted between 13-30 December 2024. 13% ran large businesses (250+ people), 18% medium (50-249), 21% small (10-49 people), 36% micro (2-9 people) and 11% sole trader and self-employed business entities (0-1 people).

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

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

What do you plan to invest in over the next 12 months? Please select all that apply

What is motivating your investment plans? Please select all that apply

Are any of the following constraining your investment? Please tick all that apply.