Proactive Investors - British and Brazilian businesses are currently the most optimistic about the outlook than their counterparts in other major nations, but confidence among UK companies wavered in the past month.
An international business outlook survey by S&P Global showed UK and European businesses were less optimistic about their future activity levels in October, with the largest fall in optimism seen in US businesses in the run-up to the presidential election, along with Italy and Japan.
The tri-annual UK business outlook survey found the net balance of UK private sector services and manufacturing firms projecting an expansion in business activity over the next 12 months remained strongly positive, but slipped to +41% in October from +44 in June.
Eight of the 12 nations tracked by the survey recorded a decline in sentiment, including most European countries.
Although this was the lowest UK reading in a year, firms remained "generally positive", the survey found, with the UK one of the most optimistic nations, helped by robust demand projections, forthcoming technology investment and hopes of more interest rate cuts, offset by concerns about the Budget and international geopolitics and increasing employment costs. The survey was conducted prior to the Autumn Budget.
As well as the loosening of monetary policy, some firms anticipate a boost to demand from rising government spending.
"While future activity expectations slipped to their lowest level in 2024 during October, the general outlook across the UK remained strong overall as firms predicted positive support from customer demand, lower interest rates and investment into new technologies," said S&P Global senior economist David Owen.
"Domestic economic conditions are expected to be resilient, but concerns about geopolitical tensions, supply chain fragility and a slowing global manufacturing sector (particularly in Europe) appeared to constrain optimism, especially among UK goods producers."
He noted that while the survey was conducted prior to the new UK's government's autumn Budget, rumours had been leaked about national insurance increases and other measures, which raised concerns about profitability and hiring plans.
Brazil has the highest balance of business activity optimism, with +43%, increased from the June survey, while in the US the balance fell from just over +40% to below 30%.
Bottom of the table were France and Germany, with the latter's balance falling below 10%.