Ipsos’s 31st annual survey of UK Captains of Industry showed that our business leaders were more optimistic than they were 12 months earlier. However, the recent announcement of the UK’s loss of its Moody’s AAA credit rating suggests another trouble filled year ahead dominated by economic problems.
Only 12% of the 103 executive board-level directors from the UK’s 500 largest businesses (interviewed between September-December 2012) thought that the general economic condition of the country will worsen over the next 12 months, compared with 31% forecasting that economic conditions will improve. At the end of 2011 the majority of Captains were pessimistic, 56% predicting that things would worsen in 2012.
But Captains do still consider that most important issues facing Britain today are mainly economic, specifically 23% consider the government deficit as the most important issue, 22% mention the lack of economic growth and 20% the Eurozone issue.
Although there is some optimism, business leaders think that it is going to take years for the economy to clearly get better. So whilst 79% of Captains agree that the Government’s policies will improve the state of the British economy, almost as many (71%) also agree that the UK is facing a prolonged period of stagnation. Two-thirds (68%) predict that it will be more than 2 years before we see any signs of significant growth.
The technology/media/telecoms sector is most likely to show the greatest potential for growth in the UK, according to half (54%) the business leaders, as they did in 2011 (52%). However, views of the much battered construction sector are clearly improving. Only 19% picked construction in 2011 as having the greatest growth potential, but this has risen to 36% by the end of 2012.
This increase in optimism among UK directors was also reported in Deloitte’s Q4 2012 CFO survey, where the net balance of opinion as to whether CFOs were more or less optimistic (about financial prospects for their company compared with 3 months ago) was neutral. In contrast in Q4 of 2011 there was a big negative net balance of -50%.
