Fragile economic reality tempers private sector improvement

BDO’s Industry Watch shows improving and benign business climate 

The UK business climate is set to enter 2018 with improved health, according to forecasts in a new quarterly report by accountancy and business advisory firm BDO.

Launched today, BDO’s Industry Watch is a quarterly economic measure of the health of the UK business climate.

In the last quarter, the Industry Watch gauge moved from -22 to -4 [within a scale of -50 to +50] for the UK economy as a whole. Although still in negative territory, the latest data shows an improving environment for UK businesses.

Looking ahead, Industry Watch forecasts that economic conditions could rise to +5 by the end of the year – marking the first time in 2017 that the UK business climate has been in positive health.

Several economic indicators drove improvements in the business climate. This included business confidence, which strengthened significantly in the second quarter, as well as the minor uptick in GDP growth seen over Q2 and continuing employment levels. Lending - a key aspect of business climate – also increased in the most recent data (Q2).

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