East Anglia: Region’s firms optimistic about recovery prospects

Shay Lettice, eastern region chairman of R3, the national insolvency trade body.

Shay Lettice, eastern region chairman of R3, the national insolvency trade body. - Credit: Roger Adams

East of England businesses are bucking the national trend when it comes to economic optimism, according to the latest Business Distress Index insolvency trade body R3.

While almost half (49%) of UK businesses disagree with Chancellor George Osborne that the economy has moved “from rescue to recovery”, only around one in five (22%) in the region oppose George Osborne’s views.

Nationally, agreement with the Chancellor’s economic assessment was strongest amongst large businesses (those with a turnover of more than £1million) of which 55% believed the economy had moved into the recovery phase, while only 40% of small businesses (with turnover of between £50,000 and £1m) concurred.

R3 eastern region chairman Shay Lettice, a partner at Cambridge accountancy firm Peters Elworthy & Moore, said: “There has been plenty of positive economic news locally, but it’s important that we don’t forget that a lot of businesses, particularly those with a small turnover, still have significant hurdles to overcome. Now isn’t the time for complacency.

“One of the most dangerous times for businesses is immediately after a recession, when they face a lack of investment and the stress of meeting increased demand. While it might feel like economic recovery is taking place, there needs to be a strong element of caution.”

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Other statistics from R3’s Business Distress Index also show the East of England business community in increasingly robust shape.

More than three-quarters (79%) of eastern region businesses report no signs of distress, such as a fall in profits, market share or sales volume, which is a significant rise from 48% in March 2013.

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At the same time, 55% of businesses in the region are reporting at least one sign of growth, which includes investment in new equipment, business expansion, increased sales, growing market share and larger profits.

R3’s report also reveals that the economic picture is rosier for larger businesses than for small. Nationally, almost three quarters (70%) of large businesses reported at least one sign of growth, yet only half (51%) of small businesses were in the same position.

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