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Businesses optimistic heading into 2016

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Optimism among businesses rose in the final quarter of 2015 to 73%, according to research from Grant Thornton’s International Business Report (IBR).

Economic growth across the private sector also increased in the final three months to December. Businesses reporting output across the manufacturing, retail and consumer sectors rose by 20% according to Confederation of British Industry’s (CBI) latest growth indicator.

The CBI expects the economy to grow by 20% over the next 3 months.

Fewer businesses expressed concerns over the availability of skilled employees with solid employment growth predicted in 2016.

According to CIPD’s analysis of the labour market:

  • employment will grow as much as half a million, greater than the forecast growth of 400,000
  • wage growth will remain at 2%, below the average earnings growth of 3.5%
  • disappointing productivity growth will remain the biggest long-term risk to the economy.

Mark Beatson, chief economist for CIPD, said:

“Research shows that most employers remain confident about recruitment going into 2016 and most say they have a choice of suitable candidates for most positions. With record levels of net migration into the UK increasing the supply of labour, it doesn’t look like we’re going to see a skills crunch any time soon.”

However Carolyn Fairbairn, CBI director general adds that there is no room for complacency coming into the new year:

“Many emerging markets are facing a testing time, with China moving to a slower growth path and other emerging economies being buffeted by low commodity prices, capital outflows and currency depreciation.”

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