The Institute of Directors (IoD) Guernsey’s third Directors’ Economic Confidence Survey reveals a noticeable rebound in confidence in the island’s economy, with the net confidence reading rising from -25% in November 2024 to -11% in May 2025. While still negative, this represents a significant improvement and a divergence from the UK, where business confidence remains low at -51%.
The uplift in confidence about the prospects for Guernsey’s economy over the next 12 months was led by the finance and professional services sectors, possibly influenced by the positive outcome of the recent MONEYVAL assessment. However, sentiment in the construction and retail sectors fell sharply, reflecting the ongoing pressures faced in those industries.
IoD members remain broadly positive about their own organisations, with a net confidence reading of +42%, down slightly from +47% in November. While still strong, this slight softening reflects a more cautious outlook among professional services firms in particular.
The survey, which was completed by 139 members – 19% of the IoD Guernsey membership – also found that:
67% of respondents expect their costs to increase over the next 12 months, consistent with the last survey.
Expectations for profits have improved marginally but remain negative overall.
Businesses still plan to grow headcount and investment.
The cost and availability of labour is now the top negative impact for members, overtaking air and sea links, although the latter remain a major concern.
Uncertainty around tax reform has eased, likely due to the States’ decision to introduce GST from 2027.
As well as tracking headline indicators, the latest survey explored members’ views on the fiscal deficit, economic growth and entrepreneurship – three themes that members expect tto feature heavily in the 2025 Guernsey Election campaign.
Richard Hemans, economic lead for the IoD Guernsey Branch, said:
‘The results of our third survey suggest that Guernsey’s business leaders are slightly more optimistic about the economy than six months ago. Confidence remains highest in finance and professional services but has fallen in construction and retail.’
‘Despite a backdrop of ongoing challenges, it’s encouraging to see the continued resilience of Guernsey’s businesses, particularly their willingness to maintain investment and employment plans.
‘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.’
Key insights from IoD members include:
Respondents see infrastructure investment, housing, connectivity and diversification as the main catalysts of economic growth.
Continued concern over housing costs and planning delays, with many citing these issues as major barriers to recruitment and expansion.
A desire to grow the economy, to improve public sector efficiency and to work more closely with Jersey before raising new taxes, with many favouring a “growth-first” approach to addressing the fiscal deficit.
Entrepreneurship will best be driven by attracting and retaining young people and equipping them with technical and entrepreneurial skills, as well as tax incentives and early-stage funding.
Frustration with regulation and government delivery, especially regarding slow procurement processes and policy inaction.
