IoD: Economic Confidence Of Business Leaders Continues To Edge Up In April

The IoD Directors’ Economic Confidence Index, which measures business leader optimism in prospects for the UK economy, rose to -10 in April 2024 from -12 in March.

This increase sustains the leap upwards that the Index experienced in March, and continues its steady recovery from its recent low point of -31 in June 2023.

Firms’ net investment intentions for the year ahead were also up on the month, rising from +18 in March to +21 in April.

However, the index of business leader optimism for the future of their own organisation declined to +38 in April, down from +42 in March, and net revenue expectations declined from +44 to +40.

Other indicators from April’s survey – cost, headcount, wages and export outlook for the coming year – remained broadly similar to the previous month.

It remains the case that business leaders are, on balance, pessimistic about UK economic prospects. However, since March, the pessimists have been in retreat. Confidence has been edging upwards and is now within striking distance of a more neutral perspective.

According to IoD members, the fundamentals are in place for some kind of UK economic recovery. Most are expecting revenues, investment spending and exports to move upwards over the next 12 months. And business leaders continue to express a much higher level of optimism in prospects for their own organisations compared to the economy as a whole – which is an encouraging sign.

However, a significant obstacle to improved business confidence is the current high level of UK interest rates. Business leaders will be looking for a significant shift in the monetary stance of the Bank of England before they are able to buy into a rosier economic outlook. As a result, they will be closely watching the outcome of the next monetary policy committee meeting on 9 May.

The IoD Directors’ Economic Confidence Index measures the net positive answers from members of the Institute of Directors to the question ‘How optimistic are you about the wider UK economy over the next 12 months?’ on a five-point scale from ‘very optimistic’ to ‘very pessimistic’.


Full survey results

712 responses from across the UK, conducted between 12-29 April 2024. 16% ran large businesses (250+ people), 21% medium (50-249), 22% small (10-49 people), 30% micro (2-9 people) and 12% sole trader and self-employed business entities (0-1 people).

How optimistic are you about both the wider UK economy and also your organisation over the next 12 months?

	Very optimistic	Quite optimistic	Neither optimistic nor pessimistic	Quite pessimistic	Very pessimistic	Don't know
Wider UK economy	2.81%	27.25%	30.06%	33.15%	6.46%	0.28%
Your (primary) organisation	7.87%	46.49%	28.23%	13.76%	2.53%	1.12%

Comparing the next 12 months with the last 12 months, what do you believe the outlook for your organisation will be in terms of:

	Much higher	Somewhat higher	No change	Somewhat lower	Much lower	Don't know	N/A
Business investment	4.5%	35.0%	39.9%	13.9%	4.1%	0.6%	2.1%
Costs	11.4%	68.5%	14.6%	3.4%	0.7%	0.1%	1.3%
Exports	3.2%	16.9%	31.0%	4.4%	1.8%	1.0%	41.7%
Headcount	1.8%	31.3%	51.1%	11.8%	1.8%	0.3%	1.8%
Revenue	7.7%	49.3%	23.3%	15.0%	2.4%	0.7%	1.5%
Wages	3.9%	56.6%	33.8%	2.9%	0.6%	0.1%	2.0%