Economic optimism
survey and commentary

Hold the press.  Here's the result from our economic optimism survey for the past 3 months…

Firstly it's interesting to note the consistency of view, even though the LinkedIn algorithm undoubtedly presented it to different people this month.

Secondly it looks like the overall picture is that we are beginning to get a little more positive after a pretty bad position in July. And interestingly this shift is consistent with the survey MD2MD conducts with its members too. (A useful cross check)

(Yes I know the overall was positive, but business leaders are mainly positive - it goes with the territory - So it's the shifts we look for)

One hypothesis might be that it's the impact of the Bank of England holding the bank rate last month. As regular followers of my comments will know, I think the uplift in rates the previous month was unnecessary - indeed wrong - and the previous rises would continue to have an impact as the consequences for fixed rate mortgages now take up to five years to flow through.

So I suspect the bank will end up having to move the rate downwards quite quickly in six months time.

By the way, the other shift I would look out for is that I'm hearing of a very sharp shift in the employment situation. 

A complete reversal over the last six months from vacancies far exceeding supply to suddenly a lot of people hunting very few jobs. A signal that for some people at least things have suddenly got tough. Which may actually be why businesses are becoming more optimistic.

The challenge for a long time has been the ability to deliver to meet demand when short staffed. That situation finally seems to be changing... although I suspect temporarily.

And to explain more widely. I've been surveying business leaders' optimism levels for over ten years now. Whilst clearly not as statistically valid as the official national surveys I have a number of times found that the signals I pick up from real business leaders are more up to date (and therefore more useful) than those from the official surveys.  

Not surprising really as the big national surveys take a few weeks to conduct and analyse and so inevitably slightly out of date. 

Our quick snapshots are therefore a useful indicator of the direction of travel.