Small and medium sized enterprises in East Anglia are stepping up their investment plans following a further improvement in new business during the final months of 2013.

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According to the latest Business Factors Index, produced quarterly by Bibby Financial Services, nearly half of SMEs in the region (48%) saw an increase in new customers during the final quarter of last year, up from 46 in the previous three months.

More than two in five of the firms (42%) said they were investing in new product development, up substantially from just 16% in the third quarter, while a similar proportion (41% said they were investin in training and staff development, up from 31% in the previous survey..

However, the survey also shows that the economic climate remains challenging for many SMEs, one in five citing costs as a major barrier to growth.

The Business Factors Index surveys the sentiment and outlook of 500 SME owners across the manufacturing, construction, transport, wholesale and business services services.

Across the South of England as a whole, including East Anglia, the South East, Greater London and the South West, 36% of firms reported an improvement in morale, compared with 30% in the third quarter, with 10% saying that business has never been better, up from 5% in the previous three months. The survey also found that two out of five firms in the south (39%) saw a rise in customers in the final quarter of 2013.

However, the overall picture for the South was slightly less positive than in the third quarter, with strong figures for East Anglia and the South West offset by a weaker performance in London and the South East.

Sharon Wiltshire, head of Bibby Financial Services East Anglia said: “The findings of our research for Q4 2013 are certainly encouraging and although we’re not yet heading back to pre-recession levels of trading, what we do have is the foundations on which to start building for a sustainable recovery.

“The reality for many SMEs in East Anglia is that running a business is still a huge challenge, and one in five, 20%, of the firms we spoke to during Q4 said the cost of running their business was the biggest barrier to growth.

“In order to start benefiting from better trading conditions, it is imperative that the financial services sector plays its part in backing those firms and providing the kind of funding that not only meets a financial requirement but works with development of the business.”

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