UK business output hits 17-month low

09 December 2019

  • Output falls to lowest level in 2019 for services and manufacturing sectors 
  • Year to date average shows all indices down this year compared to last year 
  • Typical pre-election optimism boost fails to materialize 

A decline in output across the services and manufacturing sectors has caused BDO’s Output Index to drop to its lowest level in 17 months, falling by 0.65 points to 96.04 in November. 

BDO’s Output Index, which is made up of BDO’s Manufacturing Output and Services Output indices, offers a snapshot of business productivity by weighting data from the UK’s main business surveys. The constituent indices fell this month, with the Services Output Index sinking sharply by 0.72 points to 97.19, and the Manufacturing Output also falling 0.16 points - the lowest point for each index so far this year. This has been predominantly caused by businesses choosing to run down their stockpiles once a further extension to the Brexit deadline had been agreed.

The results round off a negative year for each of the Indexes that comprise BDO’s Business Trends report. Every index covered by the report (Optimism, Output, Employment and Inflation) is down on average compared to November 2018. The biggest fall is the Manufacturing Output Index, which is down 10.47 points on average this year compared to last.

Commenting on the results, Peter Hemington, Partner at BDO LLP, said: “November’s figures mark the end of a disappointing year for UK businesses. All indices have been driven down by continued political uncertainty and a worsening global economic climate. Businesses are in need of an injection of Christmas spirit, but current indications point to a bleak December.” 

Meanwhile BDO’s Optimism Index rose slightly throughout November, gaining 0.12 points to stand at 95.71. Such a rise is comparatively flat compared to the uplift in optimism seen in the run-up to previous general elections:

  • Ahead of the 2017 election, the Optimism Index jumped by 2.31 points
  • Ahead of the 2015 election, The Optimism Index rose 1.15 points 

However, such rises are traditionally short lived, with BDO’s Optimism Index tending to fall after general elections. 

Peter Hemington added: “Optimism has risen boldly in the run-up to previous elections, which has offset declines once a new government is in place. The fact that optimism remains comparatively sluggish could signal that a more dramatic slump in confidence is on the horizon.”

To download BDO’s Business Trends New Economy report and find out more, visit 


Overview of the BDO indices:

An overview of all four indices is provided in the table below, detailing figures for the last three months and the same month of the previous year, to allow for comparison. 100 = average value. Above 95 = positive.

  November 2019 (figures for this report) October 2019 September 2019 November 2019
(equivalent report last year)
BDO Output Index 96.04 96.69 97.44 97.69
BDO Optimism Index 95.71 95.59 96.26 100.33
BDO Inflation Index 94.84 94.25 95.36 101.01
BDO Employment Index 112.22 111.82 112.81 114.65

Note to editors

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Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy.  

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.  

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Methodological notes

The BDO Monthly Business Trends Indices are prepared on behalf of BDO LLP by the Centre for Economics and Business Research ltd., a leading independent economics consultancy. Cebr has particular strengths in all forms of macroeconomic and market forecasting for the UK and European economies and in the use of business survey techniques.

The indices are calculated by taking a weighted average of the results of the UK’s main business surveys. It incorporates the results of the quarterly CBI Industrial Trends Survey (and the CBI Monthly Trends Enquiry which is carried out in the intervening months); the Bank of England Agents’ summary of business conditions; and the Markit/CIPS Manufacturing and Services PMI data.

Taken together the surveys cover over 4,000 different respondents from companies employing approximately five million employees. The respondents cover a range of different industries and a range of different business functions. Together they make up the most representative measure of business trends available.

The surveys are weighted together by a three-stage process. First, the results of each individual survey are correlated against the relevant economic cycles for manufacturing and services. This determines the extent of the correlations between each set of survey results and the relevant timing relationships. Then the surveys are weighted together based on their scaling, on the extent of these correlations and the timing of their relationships with the relevant reference cycles. 

Finally, the weighted total is scaled into an index with 100 as the mean, the average of the past two cyclical peaks as 110 and the average of the past two cyclical troughs as 90.

The results can not only be used as indicators of turning points in the economy but also, because of their method of construction, be seen as leading indicators of the rates of inflation and growth.


Tom Grant
at Headland on behalf of BDO LLP
[email protected]
Mob: +44 (0)78 3322 3170
Tel: +44 (0)20 3805 4841