Business output rises to a seven month high as employers intend to hire more
UK firms’ hiring intentions are at record highs as business output hit a seven month high, new research shows.
Accountant and business advisor BDO said on Monday that its monthly Optimism Index, which measures how firms expect their order books to develop over the next six months, saw UK business output rise up to 100.05 in March from 99.78 in February.
It says the rise bucks the average long-term trend of 100, and is the highest reading since August last year.
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Business optimism increased in March to 102.26, up year-on-year from 100.92.
The company’s employment index, which indicates firm’s hiring intentions, rose by over 4 points to 112.09 in March compared to the same period last year.
The BDO says this is the highest ever projection it has made for employment, and says the trend will continue as UK businesses invest more in people.
“The performance of both the manufacturing and services sectors is encouraging for the health of the UK economy and the data suggest that there will be an improvement in GDP growth over the next few months,” said Peter Hemington, partner at BDO.
“Businesses are retaining a positive outlook, and this may add to the pressure that the MPC feels to raise rates. But the recovery remains patchy and febrile with Brexit looming. The MPC must hold fast and keep interest rates to a minimum to encourage confidence and growth for UK businesses.”
BDO’s data is based on a weighted average of the UK’s main business surveys from the Confederation of British Industry, the Bank of England and IHS Markit.