The economic recovery is taking hold and could gather pace during the first three months of next year, according to a new survey of business confidence published.
The latest Business Trends report by accountants and business advisers BDO, which has an office in Bristol, shows that business confidence continued to improve in October, leading to expectations that the wider economy will bounce back strongly.
The report gathers responses across a range of indices. BDO’s Optimism Index, which predicts business performance two quarters ahead, shows that optimism in the services sector, which accounts for over three-quarters of the UK economy, rose from 99.2 in September to 99.9 in October while optimism among manufacturers increased to 109.6 from 107.
Overall confidence in the economy increased from 100.7 in September to 101.7 in October, outperforming the 100 mark that indicates the economy’s long-run average growth rate and echoing the predictions that the economy will now expand by 2.7% in 2014.
BDO’s Output Index, which predicts short-run turnover expectations, reveals further encouraging signs with an increase in new export orders from the Eurozone.
Both manufacturing and services increased strongly in October, driving the headline figure up from 99.5 to 100.7. Overall, the improved Output Index points to a strong end for 2013.
BDO’s Employment Index shows a more modest outlook, rising from 97.5 in September to 98.1 in October.
Partner and head of BDO in Bristol, Graham Randall, pictured, said: “With broad-based recovery now a reality, as he looks towards the Autumn Statement, the Chancellor has room for manoeuvre. 
“Recent measures have prompted recovery on the demand side of the economy, but the Chancellor risks bottlenecking growth unless he turns his attention to unlocking the supply side. As public sector finances improve, there is flexibility to increase investment in areas such as house building, along with the additional benefit of giving the construction industry a much-needed boost.”
