Figures show economy hits two-year high.

Almost three-quarters of small and medium-sized UK businesses expect their fortunes to continue to improve this year, according to a report by the UK 200 Group of accountancy practices. The group’s national economic survey, produced with chartered accountants Berkeley Jackson, revealed that 74% of businesses believe 2000 would be ‘as good or better than’ 1999. Nearly 45% of companies reported their order books were up compared with a year ago. And 28% of exporters, many of whom have been enduring tough trading conditions due to the strength of the pound, said they expected to see a jump in orders this year. However, the survey also found some early warning signs that the economy could be starting to overheat. Around 40% of businesses said they were planning to hire more staff and more than half of those surveyed were planning to make major investments. The biggest worry for most companies (70%) was new employment legislation, such as the government’s new minimum wage rules, with some predicting it would lead to higher unemployment. Sixty per cent also complained that they were suffering from skills shortages among their workforce. The survey follows fresh data from the Office for National Statistics last week which found that the UK economy was growing at its fastest rate for almost two years. The figures marked the 30th quarter in succession since the end of the 1992 recession with no fall in out-put – the longest period without negative growth since the 1970s.

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