Things starting to get better
CONFIDENCE IS AT ITS HIGHEST SINCE DECEMBER 2019 ELECTION
BUSINESS confidence is at its highest since before the last General Election, according to new data from East Midlands Chamber.
Its latest quarterly economic survey suggests more than half of local business leaders expect their turnover to improve over the coming year, with a third anticipating a rise in profits.
However, Brexit has impacted on overseas traders, it suggests.
A total of 540 businesses in Derbyshire, Leicestershire and Nottinghamshire – the most yet – took part in the survey between February 15 and March 8.
It was published as stage two of the government’s roadmap out of lockdown commenced, with the reopening of hospitality, nonessential retail and personal care businesses.
Chris Hobson, pictured, the chamber’s director of policy and external affairs, said: “The survey suggests businesses are ready to grow and support the economic recovery the country now needs.
“Sentiment among businesses is as strong as it has been since summer 2019, supported by the successful vaccine rollout programme, a roadmap for reopening the economy and a broadly positive response to the spring budget.
“As stage two of the roadmap begins, this research highlights that businesses are ready to take advantage of the opportunities this will bring as we edge towards a fully open and functioning economy, anchored by an anticipated pent-up consumer demand.”
The survey suggested East Midlands businesses also felt more confident about investing in people and equipment in a post-pandemic world. About a third expect their workforce to grow, but 7 per cent expect reductions over the next quarter.
Despite these positive signs, cashflow – which worsened for the majority of firms in each quarter of 2020 – remained a problem for a significant number, while the impact of Brexit was also being felt by East Midlands overseas traders.
A third of respondents saw overseas sales worsen over the quarter – compared with 25 per cent reporting an improvement – with four in 10 witnessing a drop in EU activity.
Mr Hobson said: “Although this was partly offset by stronger performance in other markets – particularly in North America and Asia – the EU remains the East Midlands’ most significant trading partner.
“So the extent to which businesses are able to continue moving up the learning curve for the new way of trading – or in fact whether some of the problems are structural and irreversible – will be of great importance to future prospects.
“Others are still seeing increased costs associated with the continued friction experienced following the end of the transition period with the EU.
“To what extent these pressures can be incorporated into refined business models, versus how much is passed on to customers, will be of interest to those involved in setting monetary policy.”