Businesses in the UK are bucking the trend of negative attitude that has typified much of the year, with an projected upturn in 2025.
This is according to new findings from the Lloyds Business Barometer, which reveals that more UK firms are optimistic about a stronger start to 2025 compared to their outlook at the beginning of 2024.
The Business Barometer, which surveys 1,200 businesses monthly and which has been running for more than 20 years since 2002, provides early signals about UK economic trends both regionally and nationwide. Businesses were asked about their optimism in the wider economy as well as their own trading prospects, with results indicating relatively positive sentiment. Despite indications of uncertainty in the wider environment, trading prospects continued to be resilient.
The research indicates that 70% of UK businesses expect their turnover to increase over the next year, up from 62% in December 2023, while almost 75% are confident of achieving higher profitability. Over half of the companies surveyed prioritise driving revenue and profitability, with a third concentrating on upskilling their workforce,
Hann-Ju Ho, Senior Economist at Lloyds, commented on the positive outlook, saying it’s “exciting” to see businesses with ambitious plans for the coming year and confidence in growth. “Overall, businesses have responded well to the changing external environment.
While the economic outlook has been challenging, the steps firms are taking to grow should put them in a strong position for success in 2025,” He added.
Although hiring intentions reduced for the third time in four months, over half of all business-owners expected to increase the number of employees on their books. 52% of respondents had plans to increase the size of their workforce, three times the number of businesses expecting to downsize (17%).
Despite a moderate reduction, expectations around pay are still elevated in comparison to the last four years. Nevertheless, the number of businesses that expected wage growth of 3% or more fell for the third month in a row (30%). Similarly, the proportion of businesses expecting at least 4% pay growth dipped to 16% – a four-month low.
