New year starts with boost to firms’ optimism

BUSINESSES are preparing for another year of economic growth and falling unemployment, with confidence climbing to its highest level in nearly two decades.

Lloyds’ latest survey of 1,500 companies, released today, indicates the strongest intentions to increase investment since 1994. In the next half a year, 16 per cent more firms expect to hike capital spending than decrease it.

Similarly, more than a quarter of businesses now think that they will take on additional staff in the six months ahead. Only 10 per cent expect to lay off workers, raising hopes that unemployment will continue to fall as 2014 gets underway.

According to Capital Spreads’ latest survey, seen exclusively by City A.M, fund managers expect that the economy will continue to grow in 2014, with 92 per cent of the 200 respondents forecasting continued growth.

“We expected optimism to be buoyant this quarter but have been slightly surprised by the dramatic increase in already bullish investor sentiment,” commented Nick Lewis, head of trading at Capital Spreads.

Stronger optimism spans several sectors, with other surveys released today pointing to a broad-based recovery. In EEF and Aldermore’s survey of senior manufacturing executives, 70 per cent are projecting a continued improvement in the economy, against only five per cent that now expect a decline in the year ahead.

The Association of Professional Staffing Companies (Apsco) also reveals that every sector is seeing an upturn in employment to professional positions. There has been an 8.5 per cent increase in permanent placement, despite moderate salary increases of 1.4 per cent, still running some way below inflation.