Pressure on exports has failed to dent business confidence in the East, ICAEW survey shows
- Credit: Archant
More favourable market conditions are helping to maintian business confidence in the East of England, according to a new report.
The latest UK Business Confidence Monitor (BCM), from the Institute of Chartered Accountants in England and Wales (ICAEW) and Grant Thornton, shows an improvement in financial performance for the region over the past 12 months.
The overall BCM Confidence Index for East of England now stands at plus 20.7, suggesting that business sentiment has stabilised over the last year
Gross profits jave increased by 6.1% over the last 12 months, a significant increase from the 2.5% rise seen in the previous quarter.
Firms expect to grow their staff numbers by a further 2.6% in the year ahead and the proportion of businesses in the region hindered by late payments has more than halved to 7%.
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One worrying sign, however, is that while financial performance has improved goods exports from the East of England to the European Union have fallen by 12% year-on-year.
Phillippa Bourne, ICAEW regional director for the East of England, said: “It is reassuring that businesses in the region have remained confident in the face of growing political and economic uncertainty.
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“However, there is more to do and the new government will need to take steps to get the UK economy moving forward again.
“A big priority should be to grow our exports, as our economy is becoming increasingly unbalanced and reliant on domestic demand.
“While growth built on domestic demand is fine for the moment, the benefits of low inflation and cheaper petrol will soon evaporate.
“It is crucial that we look to boost our exports both inside and outside the EU.
“Businesses need to think global from the start, and we need to make it easier for them to trade internationally.”
Paul Naylor, practice leader at Grant Thornton’s Cambridge office, added: “The good news, along with stabilising confidence, is a growth in profits, indicating that the consolidation and investment we have seen across Cambridgeshire businesses is continuing to pay off.
“Equally pleasing is that with employment expected to rise over the next 12 months, the appetite for investment appears to remain.
“However, with uncertainty around the new government’s attitude to business and the possibility of an EU referendum, many companies may adopt a ‘wait and see’ approach.
“What our county’s businesses need is stability and support from the government – and fast - to speed up the pace of growth and help them expand into overseas markets. Only this will provide the balanced, sustainable recovery the country needs.”