The UK is bucking the global trend amongst the world’s leading economies, with manufacturers signaling an upbeat outlook with regards to future business acitivty, according to the latest Markit Global Business Outlook Survey.
Although seeing confidence fall from February’s record high – the findings suggest the UK enjoyed the highest level of business optimism of all major developed economies in terms of expectations about future activity, employment and investment.
“The UK is once again the stand-out performer among the world’s largest economies, seeing by far the highest levels of business optimism in relation to output, employment, investment and profits,” Chris Williamson, Chief Economist at Markit, commented. “However, optimism has cooled slightly since earlier in the year reflecting numerous worries, including higher interest rates, a strengthening of sterling, uncertainty due to the General Election, an ongoing lack of bank lending, skill shortages and rising staff costs.”
The UK is bucking the overall trend shown by the survey results, which suggests worldwide business optimism has waned compared to the two-year high seen earlier in 2014, with expectations about future business activity growth falling and future hiring and investment intentions deteriorating markedly.
The cooling of sentiment, in part, is reflecting the growing reality of policy being tightened in the US and UK, a still weak eurozone recovery and sluggish growth in emerging markets.
Indicators of expected selling price trends meanwhile also fell sharply, hitting their lowest for over four years, in part because input costs are set to show the smallest rise yet recorded by the survey.
Williamson said the survey results suggest the global economy is set for “reasonable though unexciting growth” over the coming year, with the overall picture suggesting recoveries would be sustained.