Mon, 16 Apr 2012

A rise in the output expectations of UK businesses suggests a move towards economic growth, according to the latest ‘Business Trends’ report by accountants and business advisers BDO.

The Output Index in the report has risen to 95.7 for March, climbing above the “crucial” 95 mark for the first time since summer 2011, up from 93.7.

However, the Optimism Index – which predicts business performance two quarters ahead – fell from 98 in February to 96.7 in March, while the manufacturing Optimism Index has fallen below 95, to 94.6.

Peter Hemington, partner at BDO, says: “It’s encouraging to see positive signs for UK growth in the short term, but it’s two steps forward followed by one step back at the moment, as the overall recovery is likely to be a slow one.

“If British firms are to meet the Chancellor’s recent challenge to double exports to £1 trillion by 2020, then they’ll need a clearer and more explicit framework and strategy to relieve pressure on manufacturers and encourage investment in infrastructure and innovation.”