Davos 2014: UK bosses among the world's most upbeat on sales and job creation
Wednesday 22 January 2014
The world's elite swept into Davos yesterday on a fair wind of rising confidence among business leaders as well as higher global growth forecasts from the International Monetary Fund.
There were further recovery signs for the UK with the strongest rise in manufacturers' order books for nearly three years as well as another jump in mortgage lending. Only corporate credit figures disappointed as business lending slid in November.
The latest survey of global chief executives by the accountant PwC – unveiled on the eve of the 44th World Economic Forum at the Swiss ski resort – found UK bosses among the most confident in the world with more than nine out of 10 upbeat over growing revenues during the next 12 months.
Fewer than a quarter of FTSE 100 chief executives have found time to squeeze Davos into their diaries this year.
According to the survey – based on interviews with more than 1,300 chief executives around the world – two-thirds of the UK's chief executives plan to increase their workforce over the next year, compared to the average of 50 per cent around the rest of the world.
It comes amid an early rush of new year deal-making around the world as confidence returns after six long years of recession.
Ian Powell, PwC's UK chairman and senior partner, said "Companies right across the UK are moving beyond the private optimism they've been expressing in the boardroom to real activity in the market."
The IMF, meanwhile, lifted its global growth forecast to 3.7 per cent this year following a faster recovery among advanced economies, led by the US. It is set to expand by 2.8 per cent in 2014, but the UK received the biggest upgrade to growth forecasts, as expected, with estimated growth of 2.4 per cent this year, slowing slightly to 2.2 per cent in 2015.
The IMF also gave its blessing for the Bank of England's ultra-loose monetary policy to continue as "economic slack remains high".
The CBI's latest industrial trends survey also revealed manufacturing order books in their healthiest state since April 2011 despite a blip in January and a slight fall in confidence, with firms intending to raise investment spending.
Manufacturing is still 9 per cent below its pre-recession peak, but Capital Economics' UK economist Martin Beck said the survey was "still consistent with strong annual growth in manufacturing output of 5 per cent or more".
The Council of Mortgage Lenders said December's gross mortgage lending was 49 per cent higher than a year earlier at £17bn, making it the highest total for a December since 2007.
But this buoyancy was not matched by business lending, according to the Bank of England's latest Trends in Lending report. Credit to business shrank by £3.7bn in November – a far bigger decline than the previous month. However, lenders expect demand to pick up "significantly" in the months ahead according to the Bank's credit conditions survey.
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