Optimism still rising for firms as 2014 begins
UK COMPANIES are at their most confident in nearly a decade, with the strongest investment intentions since the downturn began.
More firms than ever are expressing positive sentiment about the economy, according to the latest business confidence monitor from Grant Thornton and the Institute of Chartered Accountants in England and Wales (ICAEW).
Between late October and late January, 37.2 per cent more firms said they were confident than not confident, a figure that has now risen for six quarters in a row, and stands at the highest level seen since the beginning of the survey in 2005.
Most companies say their capital investment rose in 2013, and expect it to keep rising through 2014. The number of firms suggesting customer demand is a significant challenge is now down to 35 per cent, from a peak of 55 per cent in 2009.
Reported turnover for the past 12 months and expected turnover for the year ahead also continued to rise into the first quarter of the year.
However, the report suggests that the UK’s trade deficit will not be shrinking soon. Firms expect to increase their exports by around four per cent in the year ahead – a number that has barely changed in the past three years, and was actually higher during parts of 2011.
Despite a considerable weakening of the pound since the onset of the financial crisis, Britain’s trade is still no closer to balance, with imports outstripping exports by a distance.
The survey also shows that businesses still have strong expectations for employment in the year ahead, but suggest finding skilled staff is becoming less easy.
“More and more businesses are telling us that getting the right people with the right skills is becoming more of an issue. This poses a wider question for the next generation of the workforce and whether they will be equipped to do the work required,” said Grant Thornton’s Scott Barnes.