Growing confidence means jobs and investment, says reportJun 26, 2012
The economy remains weak and recovery is still fragile, according to the latest UK Business Confidence Monitor produced by the Institute of Chartered Accountants in England and Wales and business advisers Grant Thornton.
However, firms are anticipating growth in jobs and capital investment over the next 12 months.
As a result, the BCM Confidence Index stands at +7, up from -8.3 in the previous quarter. The results suggest that the UK will return to growth in the second quarter of this year, indicating too that the double-dip recession was short-lived.
ICAEW East of England regional director Pippa Bourne said: “Although there has been a large increase in confidence, there is still an air of fragility to the region’s economy.
Government and business support agencies need to harness businesses’ increasing optimism about the region’s economic future and turn it into sustainable, consistent growth.
“To squander it could consign the signs of growth in our economy to stagnation for the immediate future.”
The key findings for Q2 show that business expects capital investment to grow at a rate of 1.9% over the next 12 months – a faster rate than the second half of 2011. Firms also report a rise for the second consecutive quarter in annual investment growth.
The number of jobs has increased by 2% in the past 12 months and the BCM forecasts further growth of 2.2% in the next year.
Grant Thornton managing partner Malcolm Gomersall said: “Any improvement in the key performance indicators in the Business Confidence Monitor is positive. Turnover and profits are all increasing but nowhere near the rate seen pre-recession and businesses are beginning to realise that this environment may be the norm for some time.
“However, we are working with dynamic companies that are delivering high growth in both domestic and global markets, so businesses must continue to look for opportunities.”