UK businesses set to grow in 2015, says report

The latest BDO Business Trends Report predicts continued growth for UK businesses in 2015.

According to the monthly Business Trends Indices report from accountants and business advisers BDO, UK businesses should sustain steady growth next year.

Order books for UK businesses showed sustained growth as the BDO Output Index remained at 103.2 in November, unchanged from October. Both the services and the manufacturing sub-indexes remain above the long-term average trend rate, pointing towards moderate growth in the early months of 2015.

The report suggests a GDP growth rate of two to 2.5 per cent during this quarter and the next.

Ailing economic recoveries worry businesses

However, the BDO Optimism Index fell during November due to concerns over the ailing global economic recovery and in Europe, falling to 103.9 from 104.6 in October. Manufacturing led the slide, whilst the service sector also dipped but remains above 100.

The BDO report suggested that the drop in optimism could be the start of a downward trend resulting from a return to more regular growth conditions after the strong economic performance of 2014.

Employment adds to virtually unbroken expansion

At the same time, the BDO Employment Index increased again, reaching 113 – a fresh record high. However, this doesn’t prove that all is well in the jobs market.

“Despite UK employment levels being on the up, income tax receipts for the year have been lower than expected,” said Peter Hemington, a partner at BDO.

“This suggests that the quality of jobs being created is low, while much is being made of job creation as evidence of economic policy success,” he added.