UK business leaders display cautious optimism for 2024: BCG survey

23 Feb '24

3 min read

Pic: Heorshe - stock.adobe.com

Insights

UK business leaders are cautiously optimistic for 2024 despite high inflation and interest rates, with 80 per cent confident in their business prospects.
The survey shows a decline in recession fears, plans for price increases, and a strong intent to maintain or grow workforce.
Leaders also see the UK favourably in customer demand and political stability.

Despite the ongoing challenges of high inflation and rising interest rates that have impacted the economic landscape, UK business leaders hold a cautiously optimistic outlook for the year 2024, according to a recent survey by Boston Consulting Group (BCG). The survey highlights that 80 per cent of leaders are confident in their businesses' prospects, with over half (51 per cent) anticipating profit increases, and 13 per cent expecting growth of 10 per cent or more.

Despite the backdrop of a sluggish economy, with 51 per cent of respondents still bracing for a recession this year, there is a notable decline from the 75 per cent who held this expectation in the previous year. This emerging optimism is bolstered by significant improvements in leaders' views on economic growth, consumer confidence, and inflation compared to last year, as per the 'State of UK Business' survey.

An interesting finding is the expectation among 60 per cent of leaders that customers will purchase more from their businesses this year, despite the cost-of-living pressures. This outlook comes as 77 per cent of businesses plan to raise prices in 2024, with more than half indicating increases of 6 per cent or more, and 22 per cent by 10 per cent or more. This is particularly surprising given the forecasted move towards a 2 per cent inflation rate, suggesting concerns that inflation and interest rates may not decline as anticipated.

The survey also reveals a strong intent to maintain or increase headcount, with 73 per cent of businesses planning to do so. The labour market presents a mixed picture, with nearly as many leaders finding it easier as finding it harder to hire compared to last year, challenging the narrative of a softer labour market in 2024.

Skills shortages remain a significant barrier to recruitment, especially in the public sector, where nearly half (44 per cent) of companies identify it as their top challenge. Moreover, UK business leaders feel more positive about the UK’s position on various fronts compared to other countries, with improvements noted in customer demand, infrastructure, and political stability. This optimism is particularly noteworthy in an election year, traditionally a period marked by increased uncertainty.

Looking ahead, business leaders anticipate that high energy prices, the slowing UK economy, and global economic conditions will be the most impactful factors over the next three years. Surprisingly, concerns about higher interest rates and capital costs rank lower, indicating a nuanced view of the economic challenges ahead.

Fibre2Fashion News Desk (DP)

More Textiles News - United Kingdom...