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Electric vehicles drive confidence levels

POSITIVE news from the electric car industry has helped stabilise business confidence in Northern England, which is now the fifth most confident region in the UK according to a new study.

The results of the ICAEW UK Business Confidence Monitor Q2 2010 survey of senior business professionals showed that firms in Northern England are now more upbeat about headcount for the coming 12 months – forecasting growth in the number of employees of 1.7%.

This was reflected in Nissan’s announcement that it will produce batteries for its electric car in Washington.

However, as in the previous quarter, the good news is balanced by job losses at Corus and at Jarvis, which although based in York, will have implications for employees in Northern England.

The Q2 2010 BCM for Northern England shows a Confidence Index score of 28.0. The Confidence Index increased by 0.9 points from Q1 2010 and is now 2.5 points above the UK average of +25.5.

There are expectations of strong growth in the key indicators of business health, after marginal growth during the 12 months to date.

After a rise of just 0.5% over the last 12 months, turnover and gross profits are both expected to grow by 5.8% over the coming year, the strongest forecast in both indicators since Q1 2008.

Sales volumes are expected to expand by 6.1% in the coming year after growth of only 0.6% over the last year. This compares to a UK average forecast of 5.4% and is the highest since Q4 2007.

ICAEW Northern regional director Keith Proudfoot said: “While there are some strong indicators of rising confidence, the bottom line is still going to dictate business success. Those businesses with a strong cash and customer base will be the ones best able to take advantage.

“A more positive outlook for key financial performance indicators in Northern England is consistent with confirmation of the UK’s exit from recession as the economy expanded by 0.2% over the first three months of the year.”

“However, the construction sector, which employs a greater proportion of the workforce in Northern England than in any other region, may be slipping back into recession.

Nationally, there has been a broadening of confidence in more sectors and regions as economic recovery continues at a sluggish pace.

Against a backdrop of political uncertainty in the run up and through the General Election campaign, it shows that UK companies are operating within their means and planning with what they already have, rather than taking on new risks.

This was posted in Bdaily's Members' News section by Ruth Mitchell .