BUSINESSES were increasingly confident of a broad-based UK recovery as 2013 came to a close, with both services and manufacturing firms beginning the year on a strong footing.
Based on 8,000 responses to the latest survey by the British Chambers of Commerce (BCC), the group now forecasts that the economy grew by 0.9 per cent during the fourth quarter, the fastest pace in 2013.
Growth in domestic orders, employment, turnover and profit confidence for the manufacturing sector are at the strongest level the BCC has recorded since the survey began in 1989.
“It is especially pleasing that the spurt in the manufacturing has proven not to be a fluke, which demonstrates the dynamism of our small, high value, manufacturing sector,” said John Longworth, the BCC’s director general.
Similarly for services, growth in export sales, orders, and employment reached record highs.
An increasing number of firms are also indicating that they are running at full capacity, with 46 per cent of manufacturers and 43 per cent of services companies saying they are working at full steam.
A separate report out this morning by Grant Thornton reveals that the UK is among the most confident countries for business going into 2014, taking seventh place in a survey of 44 countries, and outstripping China and the US.
Net optimism in the UK stands at 71 per cent, a colossal increase from the last quarter of 2013, when the balance of confidence in the economy stood at minus three per cent.
The survey also suggests growing limits on capacity: 23 per cent of firms expect finding skilled workers will be major constraint in 2014, up from 14 per cent 12 months ago.
Expectations for profitability also rose by 13 percentage points from the end of 2012. Crucially, an increasing number of firms also expect that they will increase their business investment, as well as spending on research, plant and machinery.