East Anglia: Business optimism continuing to build, Lloyds Business Confidence Index survey reveals
PUBLISHED: 06:00 30 June 2014
Business confidence in East Anglia has increased strongly since the start of the year, according to the latest Business in Britain report from Lloyds Bank.
The findings of the twice-yearly report, now in its 22nd year, will fuel hopes that the region is well placed for a sustained recovery.
The survey’s key Business Confidence Index tracks businesses’ views of expected sales, orders and profits for the coming six months and presents the overall “balance” of opinion, weighing up the percentage of firms that are positive in outlook against those that are negative.
In this latest report East Anglia’s confidence index has increased by 10 points to 57%, from 47% in the previous survey in January, mainly driven by increasing profits.
Steve Elsom, area director for SME banking in East Anglia for Lloyds Bank Commercial Banking, said: “We hope that this upturn in confidence will lead to a further improvement in economic activity for the second half of 2014 to allow East Anglia businesses to grow and prosper.”
Prospects for firms across East Anglia in the second half of 2014 also look set to continue the sharp rebound in UK economic activity since early 2013.
Almost two-thirds of East Anglia businesses (64%) said that they expect their orders to increase during the second half of the year; compared to only 3% that anticipate a decline. The resulting 61% overall net balance represents a 11 point increase from January 2014.
Similarly, nearly three-quarters businesses (71%) said they think their sales will increase in the next six months, while less than one in 10 (7%) expect a drop, leading to a 64% overall balance − a nine point increase from the beginning of the year.
The balance of firms anticipating greater scope for increasing prices over the next six months has decreased by 10 points to 22% while the net balance of firms expecting rising profits has increased to 46%, from 35% in January.
The net balance of businesses expecting to increase their exports over the next six months rose by two points to 54%. Just 3% cent expect their exports to drop in the next six months compared to more than half of businesses (57%) who anticipate an increase.
Over two-fifths (46%) of businesses expect to grow their total exports to Europe during the second half of the year, with 6% expecting a fall. This is an increase from six months ago when the overall balance expecting an increase was 32%.
Almost a third of East Anglia businesses (32%) said that they will increase staff numbers during the second half of the year while 9% said they planned reductions.
The overall net balance of 23% expecting to boost staff numbers is a rise of five points from January this year and a fresh survey high. The increase in the net balance points to further employment gains as the recovery matures.
At the same time, the balance of companies reporting challenges in the recruitment of skilled workers continues with a three point increase to 33%.
The report shows that nearly a third of East Anglia businesses (30%) expect to increase their capital expenditure over the next six months while just 8% are planning cutbacks. This results in a net balance of 23% planning to ramp up investment in the second half of the year, which is an increase of 14 points from January this year.
Steve Elsom added: “It’s encouraging to see that East Anglia businesses are looking to export more and that they feel more bullish about Europe as it emerges from recession. The survey implies that they are eager to invest more in infrastructure and staff, which we hope will result in them developing and growing on the international stage.”