IoD: Business Confidence Lifts But Supply Chain Concerns Rise

As the conflict in Iran continues, there are growing concerns among firms over potential shortages, particularly amongst those with complex physical supply chains. Around a third of manufacturers, wholesalers/retailers and construction companies have already experienced shortages. And you can see firms are taking clear steps to better manage risk to their supply chains, through investing time in improving relationships with key suppliers, better understanding vulnerabilities in supply chains, diversification and stockpiling.

Amidst yet another global shock, there’s a distinct sense from business leaders that navigating global uncertainty is becoming normalised in board rooms. April has seen a small improvement in the confidence of business leaders in the economic outlook, accompanied by rises in revenue expectations and investment plans. Although these improvements are from very low bases, there is more evidence of targeted investment resuming, particularly in AI, with growth opportunities in renewables and international markets. But the dominant theme is of ongoing cost pressure, regulatory burdens, fragile demand and hiring freezes.

As firms take actions to address their own resilience and supply security, it is important for the UK to do the same. Increased access to international markets – including the EU – will improve the UK’s growth resilience over time. But urgent action is needed to address UK energy costs. There must be an honest recognition that the UK will remain reliant on fossil fuels for many years to come, even while we push hard for the important shift to renewables. It makes sense to exploit and monetise our own resources, for the UK’s economic security.