Business confidence sliding on the back of Brexit and US elections

03 November 2016

Large political events such as Brexit and the US elections are starting to have knock on effects on economic performance, in particular in the regions most exposed to the Anglo-Saxon powerhouses.

According to a study by Grant Thornton, conducted among 2,600 business executives in 37 economies, major economies across the globe are seeing a pronounced change in economic sentiment over the last quarter.

The sliding in confidence in the UK, down 19 percentage points, mirrors the unfolding of Brexit. Before the turn of the year, optimism was riding high at 74%. But then, in the lead up to the vote, it fell away sharply to 40%, reaching its lowest levels since the start of 2013 with news of the result. The trend is not just true for business confidence, say the authors, but is visible across seven out of eight key business indicators studied. Only export prospects have risen, up 10pp to 19%, on the back of the cheaper pound vis a vis the euro.

Ed Nusbaum, Global CEO of Grant Thornton, highlights that “UK businesses expect their economic fortunes to begin to slow down, with low optimism reflected in expectations of a weaker performance.”

Political events are impacting global economy

Confidence has been hit across parts of Europe, too, where economies are waking up to a post-Brexit reality. Ireland (-24pp), France (-18pp) and Spain (-19pp) saw significant declines in sentiment, with the EU and the Eurozone on the whole both suffering a decline of -7 percentage points.

In the US, optimism dropped by 1pp, as US companies are feeling shaky in the lead up to next week’s presidential election, contributing to a significant 11pp fall over the year. Looking ahead, lower levels of confidence are expected to affect performance, with companies anticipating a fall in revenue (-5pp), a decline in investment in plants and machinery (-4pp) and selling prices (-2pp). Across the board the US however tells a slightly different story than Europe, says Nusbaum, as some areas of investment are holding up a little better. Mexico, one of the US’s main trade partners, took a 22pp tumble in the last three months alone.

The data from Grant Thornton shows that a significant increase in economic uncertainty (+6pp) has materialised over the last three months, making it now the biggest constraint for businesses worldwide. “Political events like Brexit and the US presidential election understandably rattle the global economy and test the resilience and elasticity of businesses worldwide. In general, businesses do not like uncertainty, and that is what is happening,” comments Grant Thornton’s CEO. 

“The outcomes of political events take time to unfold and we have little choice but to be patient. During the unfolding, however, policymakers must ensure open dialogue with the business community, so that shocks and surprises are kept to a minimum.”


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Project management industry adds £156 billion of value to UK economy

15 April 2019

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.


Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”