Spirit of optimism as businesses report increased confidence

Businesses in the North East are showing signs of increased confidence suggesting a new spirit of optimism.

The Q1 2013 regional survey of senior business professionals has recorded a Confidence Index score of +12.3, compared with a low of -7.7 in Q4 2011

The findings come from the ICAEW/Grant Thornton UK Business Confidence monitor and according to the report, exports continue to grow steadily..

Latest HMRC statistics show that export of motor vehicles made up roughly 40% of total exports and have grown year on year by 13.7% in the first three quarters of 2012.

The Society of Motor Manufacturers and Traders (SMMT) predicts even stronger growth in 2013.

Some businesses are showing even higher expectations, Walker Filtration, a manufacturing firm based in Washington, is targeting growth markets in Latin America, Asia and the Middle East and has published plans to increase sales by 10% in 2013.

ICAEW Regional Director Keith Proudfoot says: “Generally businesses are reporting steady growth over the past 12 months and are expecting that to continue over the coming year.

“Indeed, if the predicted increases of 5.1% in turnover, 4.5% in gross profits and 5.3% sales volumes are achieved, the region would return to the rate of expansion seen before the financial crisis.

“However, there is some need for caution. Aside from the local BCM findings, the word on the street up in the North of England is that while key areas like construction and property seem to be suffering less, there has been rapid deterioration in consumer-facing industries and financial experts locally are talking of the emergence of a twin-track economy.

“The final piece of good news this quarter is that although unemployment locally remains higher than the UK average of 7.7%, there has been a general stabilising of hiring conditions.

“ONS figures indicate a significant reduction in the unemployment rate, which between September to November 2012 dropped by 2.9% to 9.1%, compared to the same period in 2011.

“We are by no means out of the woods – but there now seem to be some encouraging paths to be followed.”