UK business optimism rises heading into the new year

19 January 2016

Businesses across the globe are ever so slightly more optimistic about their country’s economic outlook going into the new year, research by Grant Thornton highlights. Particularly India and Ireland remain optimistic. Concern about China’s economy has been tempered slightly, boosting the outlook of businesses in neighbouring countries. The UK is Europe’s second most optimistic country, following from strong export, talent and investment figures.

Grant Thornton recently released its International Business Report (IBR) for Q4 2015. As part of the report, the consulting firm explores the business confidence expressed by businesses in 36 countries across the globe. The research shows that global optimism about the world economy has remained relatively flat over the year 2015. Just over a third (35%) of businesses was optimistic about the world economy over the coming 12 months in Q4 2014, which has increased slightly to 36% in Q4 2015.


Top 12 most optimistic


When comparing regions, it shows that the US has seen a significant decrease in confidence, falling from 74% in Q3 to 50% in Q4. Latin America on the other hand has seen business optimism across the whole increase slightly, up from 11% to 18% in Q4. Argentina, putting its financial troubles behind it, has seen its optimism rocket to 68% – the highest since 2011.

According to the firm’s research, many of the world’s regions are going into 2016 with an air of optimism. The fear of China’s slowdown impacting local players has been tempered, while the country itself is more optimistic about its outlook – increasing from 26% to 36% in Q4. Indonesian businesses are considerably more optimistic (36% to 56%), while Malaysia (-28% to -14%) and Thailand (-8% to 4%), which have taken bigger hits to confidence, have eased. The APAC countries businesses have shown considerable improvement to their economic expectations, up from 20% to 31% in Q4. India is the region’s most optimistic country, at 89% of those surveyed.


Next 12 most optimistic


European confidence
For the first time since the financial crisis stable reigns across Europe, where, on average, 38% of businesses surveyed are optimistic about their economy over the next 12 months. This is a consistent number compared to Q3 and Q1 of 2015.

“The resilience in the EU business community is remarkable when you consider the potential social and political flashpoints. The migrant crisis is yet to be resolved, and the threat of terrorism remains very real, while one of its leading members could vote to leave this year,” comments Ed Nusbaum, Global CEO at Grant Thornton. “Yet businesses are shrugging that off and thinking longer-term. Investment in R&D is set to rise and while challenges remain, economies like the UK, Ireland and Spain exemplify the broad based optimism across the continent.”


12 least optimistic


UK economy
The UK businesses assessment of the economy is the second most positive in Europe, coming in at 73%; only Ireland does better at 88%. The UK has been trending upwards recently, with optimism up 6% since Q3. The optimism is buoyed by a number of factors, including export prospects increasing 11% to 23%, while profitability expectations rose 22% to 63%. The need to innovate has trickled down to UK businesses, with an 8% jump in R&D budgets up to 25%. There are also fewer businesses concerned about the availability of talent. One fifth (21%) sees this as a constraint compared to 31% in Q3, and those expecting to increase employment are up by 8% to 40%. The country’s businesses are also the least concerned about global economic uncertainty in the coming year.

Robert Hannah, Chief Operating Officer at Grant Thornton UK, comments: “In many ways, the UK’s optimism is testament to the newfound resilience of our economy in light of the myriad challenges it's faced over recent years. Whilst major socio-economic issues such as the migrant crisis, questions over our relationship with the EU and matters of national and international security remain unresolved, UK businesses are successfully calibrating to the volatile, uncertain, complex and ambiguous (‘VUCA’) global business environment.”


More news on


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.”