IoD press release Economic confidence amongst business leaders hits four-month low
The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, dropped back to -14 in June 2024 from -3 in May.
- There were notable drops in business leaders’ investment intentions, which fell to +19 in June from +30 in May.
- Furthermore, headcount expectations declined in June to +22 from +30 in May and revenue expectations also fell to +39 from +45 in May.
- Meanwhile, export expectations continued to remain largely stable, rising slightly to +15 from +13 in June and wage expectations fell from +64 in May to +52 in June.
Business leaders’ confidence in their own organisations also declined slightly to +35 in June, down from +41 in May.
Anna Leach, Chief Economist at the Institute of Directors, said:
“It’s disappointing to see that the confidence of business leaders has dropped back in June from last month’s three year high to a four-month low. This may reflect a pause in decision-making ahead of the election, but there are broad-based indications of softer activity in this month’s data, with expectations for investment and headcount both falling.
“Alongside signs of economic vulnerability in our data, there are indications that inflationary pressures continue to abate – wage expectations in this survey were the weakest in almost three years. It is to be hoped that this combination helps support a move down in interest rates in August, which will alleviate pressure on businesses.
“There’re plenty of issues for a new government to get into post-election to address the persistent weakness in the UK’s growth prospects. From industrial strategy to skills reform to governance changes that will reinforce the quality of leadership in UK companies, there’s huge potential to be unlocked across the UK.”
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
584 responses from across the UK, conducted between 14-27 June 2024. 16% ran large businesses (250+ people), 20% medium (50-249), 22% small (10-49 people), 30% micro (2-9 people) and 12% 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:
