BDO Optimism Index: “UK business confidence levels sink to 15-month low”

Business output in the UK has recovered from July’s six-year low, but optimism has hit its lowest level since May 2017, when business confidence wobbled following the announcement of Prime Minister Theresa May’s snap General Election. That’s according to the latest Business Trends Report compiled by accountant and business advisor BDO LLP.

BDO’s Optimism Index, which shows how businesses expect output to develop in the next three-to-six months, declined by 0.43 points in August to stand at 101.93. Britain’s services sector, which accounts for approximately 80% of UK GDP, is feeling particularly gloomy about the future, with confidence falling to its lowest recorded level since March last year.

This drop in optimism emerges one month after the UK’s services sector contracted for the first time in eight years, when output plummeted to 94.73 in July. While August witnessed a promising rebound, with output rising to 97.17, this remains 3.12 points beneath the output figure for this time last year.

The manufacturing sector also experienced a slight dip in confidence during August, despite an increase in output. BDO’s Manufacturing Index shows that output rose from 100.16 in July to 102.06 in August, remaining comfortably within positive growth territory, but optimism slipped for a second consecutive month.

This broad-based decline in optimism is indicative of the lack of political progress made on key economic issues, most notably the UK’s trading arrangements, as the ongoing Brexit negotiations reach a critical phase. Compounding this, the international economic outlook has also soured, and particularly so in Europe, with anaemic wage growth and weak confidence threatening to undermine demand in Britain’s key export markets.

While the Government has set a target to raise exports to 35%, there will be disquiet that UK export volumes declined by 3.6% in Q2, driven by a drop in exports to non-EU markets.

Commenting on the BDO Business Trends Report’s findings, Peter Hemington (partner at BDO LLP) said: “After more than two years since the UK voted to leave the EU, the lack of progress on what our future trading relationships will look like is now undermining business confidence and testing companies’ resilience. With the services sector accounting for more than 80% of UK GDP, the Government must do more to reassure businesses that it will protect Britain’s 26 million services sector workers as Brexit negotiations take place, particularly considering the UK has the highest share of services exports than any leading economy.”

*To download BDO’s New Economy report and find out more visit

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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