UK business confidence most upbeat

UK business confidence remains the most upbeat among the world’s major economies, according to Markit Economics.

Research from the financial information provider shows that 41% of manufacturing firms and 39% of service sector companies expect their staffing levels to be higher this time next year, compared to just 10% and 7% respectively that expect headcounts to fall.

Capital expenditure is meanwhile anticipated to rise at 38% of goods-producing firms and at 26% of service sector companies, compared with 15% and 13% respectively that expect to see a decline.

At 35%, the number of companies expecting their input costs to rise exceeded those expecting a decline to the smallest extent for five years, dropping in both manufacturing and services.

Expectations in relation to selling prices likewise eased, indicating the weakest inflationary pressures since June of last year in both sectors.

However, the survey reveals a growing list of concerns among UK firms about the outlook for the year ahead which have dampened optimism compared to the summer.

Key threats commonly cited include fears of a worsening economic climate arising from an escalating crisis or recession in the Eurozone; uncertainty caused by the General Election in May; the prospect of higher interest rates next year and any accompanying slowing of demand; the damaging impact of any marked appreciation of sterling and instability stemming from geopolitical issues.