The business community is showing “slightly more” optimism about the island’s economy says the IoD – but its recent survey is still showing a negative figure.
The Institute of Directors’ Economic Confidence Survey results show a slight rise over the last six month period, with a noticeable rebound from -25% in November 2024 to -11% in May 2025.
While still negative, it’s a significant improvement said the IoD.
The organisation said it feels that swing towards zero represents a “noticeable rebound in confidence in the island’s economy,” and that islanders should know that “while still negative, this represents a significant improvement and a divergence from the UK, where business confidence remains low at -51%”.
The survey, which was completed by 139 (19%) IoD members also found that the confidence uplift was led by the finance and professional service sectors.
The survey results show they are likely to be influenced by the positive outcome of the recent Moneyval assessment.
The survey was completed by 55% of respondents from finance, 14% from legal and professional, 6% from construction.
Sentiment in the construction and retail sectors fell sharply by contrast, with those industries continuing to grapple with ongoing pressures acknowledged Richard Hemans, the Economic Lead for the IoD Guernsey Branch.
“Confidence remains highest in finance and professional services but has fallen in construction and retail.
“Despite a backdrop of ongoing challenges, the survey has provided a clear steer on what business leaders want to see from the next States – strong leadership, bold decisions, and faster action on infrastructure, housing and connectivity.”
The survey also found some further positives emerging from local businesses with some still planning to grow headcount and invest.
Uncertainty around tax reform has eased, likely due to the States’ decision to introduce GST from 2027 says the IoD.
That could change after the new States members are sworn in this week depending on who is elected to what roles on P&R.
Other negative concerns arising from the survey found that 67% of respondents expect their costs to increase over the next 12 months. That result is consistent with the last survey showing this is an ongoing concern.
Businesses also said that their expectations for profits have improved marginally but remain negative overall.
The IoD said the overall concern though is ‘labour’ with an ongoing shortage of workers now the top negative impact on local businesses.
That’s overtaken concerns about air and sea links, although they remain a “major concern” said the IoD.
The survey results also highlighted that ‘entrepreneurship’ will be a positive driver for the island, but itself must be driven by attracting and retaining young people.
The IoD said equipping them with technical and entrepreneurial skills, as well as tax incentives and early-stage funding is key to realising any benefits.