Grant Thornton: Optimism of UK businesses stagnating

23 April 2015

While business optimism in the Eurozone has almost tripled in the first quarter of 2015, UK businesses are feeling less confident, research by Grant Thornton shows. Compared to the rest of the world, the UK is still amongst the most confident economies, with especially Eastern Europe and Latin America seeing decreased levels of optimism. According to the firm, this presents both concerns and opportunities for UK businesses. 

The most recent edition of Grant Thornton’s International Business Report (IBR), for which it surveyed more than 5,400 business leaders in 35 economies, shows a jump in business optimism in the Eurozone in the first quarter (Q1) of 2015, with confidence moving back up towards pre-crisis levels. The research, however, also shows that the UK is lagging behind as the country saw its business’ optimism fall slightly in Q1.

European optimism
In the Eurozone, optimism almost tripled from 13% in Q4 2014 to 38% in Q1 2015. The economies hardest hit by the financial crisis, such as Spain (52%) and Italy (32%), experienced the strongest improvements.  Ireland*, also one of the hardest hit countries, tops the global list of business’ optimism with 92% of its businesses confident.  The European country with the least optimism is French which saw a net percentage of businesses optimistic in the economic outlook of -15, although this percentage is up from -36 in Q4 2014.

Net percentage business optimism Europe

Stagnating UK
The research shows that although most business leaders feel more confident this year than in 2014, leaders in the UK are amongst the ones that feel less optimistic, as their optimism dropped to 65% in Q1 2015 from 68% in Q4 of 2014 and 83% during the same period last year (Q4 2014). Main concerns, as listed by the UK businesses surveyed, include lack of skilled workers (31%), economic uncertainty (28%) and regulation and red tape (23%).

Commenting on the results, Scott Barnes, CEO of Grant Thornton UK, says: “Businesses trade on certainty, so the uncertainty created by the highly unpredictable General Election, coupled with continued dialogue on Britain’s future in the EU is starting to unnerve some business leaders. In order for their growth expectations to translate into more tangible realities, businesses need to invest in the skills and resources for growth – a difficult thing to do when so many ‘known unknowns’ still linger.”

Net percentage business optimism globally

When comparing UK with other countries globally, the UK is still among the top countries and is found on a shared sixth place with Australia, behind Indonesia (68%), the Netherlands (78%), the Philippines (86%), India (89%) and Ireland. Latin America (5%) and Eastern Europe (6%) have seen sharp downturns in optimism, with Argentina at the bottom of the list at -38% and Brazil at -18%.

According to Barnes, these decreased confidence levels will also impact optimism levels in the UK. “The once-mighty BRIC nations seem to no longer be moving in lockstep, as the Chinese and Indian economies gather steam, the Russian and Brazilian markets seem to be abating.  This offers the obvious concerns for UK businesses exporting to these markets; but also a significant opportunity for UK businesses to look beyond the traditional emerging economies to other high-growth developing nations where ‘Brand Britain’ carries a premium.”

* The 2014 Pulse CEO Survey by PwC Ireland found similar figures when it reported that 86% of Irish CEOs have confidence in a positive future outcome for the Irish economy.


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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.”