This quarter, confidence decreased significantly across all business sizes tested:
The most pessimistic region is Wales / South West England with a Confidence Index of 34, whilst it is the North that retains the most confidence with an index figure of 38.
Whilst all regions saw a significant fall to Business Confidence, southern regions appear to have experienced the sharpest decline in Q4 2024; Wales / South West (-6 points), London (-7 points) and the South East (-8 points) respectively.
At Q4 2024, confidence decreased in all of the nine industry sectors. Five of nine sectors were significant decreases (Business Services, Wholesale, Other Services, Agriculture, and Accommodation), whilst four of nine were not significant and can be viewed as directional changes (Construction, Transport, Education and Production).
The sector with the greatest drop in its Confidence Index was Agriculture, with a -10 point fall to an index of 33. Only Accommodation as a sector has a Confidence Index lower than this (28) after it recorded a significant -8 point fall in Q4 2024.
The Education sector is most confident with an index of 43, although this is still below 50 and therefore indicates pessimism towards the UK economy.
Looking at start-ups and established businesses with a turnover of £0-2m, Business Confidence decreased significantly for younger business owners (up to 34-year-olds) by -7 points to 32. Similarly, the Confidence Index decreased significantly by -7 points for older business owners (65 and over), falling to 36.
The scores for those aged 35-64 also decreased by -4 points to 37 for this quarter, but this was not statistically significant.
Commenting on the findings Helen Davey, Director at Savanta, said:
“After a notable improvement in Q3, business confidence has significantly declined in Q4, reaching its lowest level in two years. The recent Autumn budget introduced several challenges for UK businesses, including higher business taxes and changes to employer’s national insurance contributions, necessitating more careful management of staff and pricing.
This decline could also reflect global uncertainties, particularly concerning the impact of the incoming Trump administration.
As we enter 2025, some of these uncertainties are expected to be resolved, hopefully providing clearer guidance for business planning.”
Quarterly findings are from Savanta’s Market Vue Business Confidence programme conducted among 3062 GB businesses from start-ups to companies with £1bn turnover, surveyed between 19th September 2024 – 13th December 2024.
Indices are mean scores based on a scale of ‘extremely positive’ (100), ‘fairly positive’ (75), ‘neither positive nor negative’ (50), ‘fairly negative’ (25) and ‘extremely negative’ (0), for the question “How do you feel about the current health of the UK economy?”
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