East Anglia: CBI, Grant Thornton and R3 surveys point to growing confidence in the recovery
PUBLISHED: 16:48 21 January 2014 | UPDATED: 17:01 21 January 2014
Three new business surveys have underlined the gathering pace of economic recovery, across the UK and within the eastern region.
The latest quarterly Industrial Trends Survey by the CBI shows new manufacturing orders at their strongest since April 2011, with expectations for the next three months at their highest for nearly two years.
Grant Thornton’s latest International Business Report reveals a 74% surge in business optimism in the UK over the past year.
And figures from insolvency trade body R3 indicate that the East of England is following the national trend, with its latest Business Distress Index showing that 82% of businesses in the region are how showing at least one key indicator of growth.
The CBI survey shows a strong increase in domestic orders and a fall in uncertainty about demand levels, despite export orders remaining flat over the past three months, while investment intentions for the year ahead have also picked up.
Stephen Gifford, CBI director of economics, said: “The recovery in the manufacturing sector is continuing to build and confidence has improved.
“Growth in the volume of total new orders has reached its highest rate since April 2011, and this is encouraging. However, now is not the time to relax and take our foot off the gas. There are still risks ahead and our manufacturers need help to break into high-growth export markets.”
The report from accountancy firm Grant Thornton shows the UK now to be the seventh most optimistic country in the world about its prospects for business growth globally, ahead of both the US and China where optimism has slowed sharply in the last quarter.
Its figures show that 69% of UK businesses are expecting increased revenues over the next 12 months, up 20% year-on-year, which is reflected in a 13% rise in expectations for profitability, to 63%, and 7% drop in those anticipating reduced demand, to 24%.
James Brown, practice leader at Grant Thornton’s Ipswich office, said: “The rebound in confidence and sustained performance of UK businesses over the past year is something that can truly be applauded and is a picture we are also seeing mirrored across Suffolk.
“The results of our Suffolk Ltd survey at the end of last year showed the county’s larger businesses are performing extremely well, with many investing cautiously for growth.”
However, he added: “The broad base of the recovery, largely driven by mid-market businesses, sets a solid foundation for growth to continue in 2014, but the general economic outlook remains fragile at this stage.
“To make the most of these gains and continue rebalancing the economy to ensure its fitness, business leaders are relying on policymakers to take the right actions which enable further growth − reducing red tape, increasing access to credit and assistance in exports.
“These measures would not only help embed long term, sustainable growth but also further solidify the UK’s position as one of the world’s best places to do business.”
The figures from R3 show more than half of firms in the eastern region (59%) declaring an increase in sales volumes and a similar proportion (51%) reporting increased profits.
Two out of five firms (40%) say their business is expanding and more than one in three (36%) say they are growing their market share.
R3’s eastern region chairman, Shay Lettice, a partner at Cambridge accountancy firm Peters Elworthy & Moore, said: “These latest results are a welcome sign that the recovery is bedding in and gaining ground.
“The number of businesses with increased profits has more than doubled since the summer from 23% to 51%, and there is a similar story with regard to market share and investment in new equipment.
“After such a prolonged period of stuttering growth, this is highly encouraging. We’ve never seen such a rapid improvement from one survey to the next and I very much welcome being able to talk about good news for a change.”
R3’s latest survey also highlighted that half (51%) of East of England businesses are feeling positive about their trading prospects and expect business activity to increase in 2014.
Shay Lettice continued: “The willingness of businesses to feel more positive about their long-term future suggests a level of business confidence that has previously been missing. If this change in attitude can unlock business investment, then that bodes well for full economic recovery.”