Businesses feel bullish about growth prospects in 2016

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​Businesses expect growth to continue in 2016 as business optimism increased for the first time in over six months, according to the latest Business Trends Report by accountants and business advisers BDO LLP in Yorkshire.

BDO’s Optimism Index increased to 102.2 from 101.9 this month, the first uptick in confidence since February. Confidence is underpinned by continuing low inflation rates, which are helping manufacturers in particular. The BDO Inflation Index sits at 96.1 this month, showing that businesses expect input prices to rise slowly.

BDO’s Employment Index still sits at a high level (107.6) this month. Coupled with increasing wages, this suggests the consumer-led recovery is set to continue.

But ​BDO said ​businesses and policy makers cannot afford to be complacent​. Last week ​the IMF warned that the risk of a global recession is still on the horizon. BDO is calling for a boost in ​G​overnment and business investment to protect growth against future global economic tremors.

Terry Jones, partner and head of BDO LLP in Yorkshire, said: “The economy looks set for continued growth in the coming months, but this should not lead to complacency.

“Policy makers must act to insulate the economy from the increasingly gloomy global economic outlook. So far our recovery has largely been based on consumer spending, but we need business and public sector investment if we are to rebalance the economy, boost productivity, and make sure that companies thrive in the region.”