12 bdo thames valley – business barometer
A quarterly street-level view of business sentiment ...
... helping to inform decisions on growth, investment and employment in the region
In today’s uncertain economic climate, confidence and business sentiment play an important part in designing long term, sustainable growth. In the Thames Valley thousands of extremely diverse businesses – from SMEs to large multinational corporations – drive an impressive 15% of the UK’s economic output in an area of just 2,200 square miles. BDO, working in conjunction with the Twenties Club, felt it was important to develop a barometer for businesses operating in the Thames Valley that would not only measure how they are feeling about the economic conditions, but also provide an opportunity to benchmark themselves against other businesses in the region on areas of performance, recruitment and investment.
"I think the Thames Valley region is very buoyant and this may be partly down to the fact that there are a lot of global companies in the area."
Gordon Esslemont Commercial director, Ultima Business Solutions
Despite the sombre UK forecast, Thames Valley businesses are optimistic about their own prospects
Julian Frost, partner and head of BDO in the Thames Valley
More than 120 Thames Valley businesses participated in the first survey, which took place during April, just as the economy officially slipped back into recession and the eurozone crisis started to intensify. This was combined with a small number of in-depth company interviews. It was also completed soon after the monthly BDO Business Trends report pointed to a sluggish recovery for the UK economy as a whole, amidst stagnant employment, output and optimism indices and suggestions that inflation was unlikely to reach the Bank of England’s 2.0% target by the end of the year.
New business pipelines and turnover are increasing in the Thames Valley
New business pipelines are increasing for the majority (64%) of businesses surveyed. More than half (57%) witnessed an increase in turnover in the last quarter, with 61% predicting further turnover growth in Q3 2012. Expectations were higher among the SME community with 67% expecting turnover to increase in the next quarter.
Economic confidence
"Growth and expectations of growth are a predominant theme."
Julian Frost BDO Profitability levels up, but continue to trail turnover growth
47% saw their profitability increase in the last quarter and this percentage is constant in terms of expectations for the next quarter.
Businesses are cautiously optimistic when it comes to economic confidence…
... when asked about overall economic conditions in the Thames Valley. 37% believe the general level of economic confidence has improved while 45% say it has remained the same.
Employment is increasing slowly
30% of businesses increased headcount in the previous quarter while 38% expect to increase headcount in the coming quarter. Half expect headcount to remain the same. This was slightly higher within SMEs where 60% expect headcount to remain the same.
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – JULY/AUGUST 2012
"It does feel as if people are more cautious at the moment. I am finding it quite mixed and patchy."
Gareth Osborn Director, SEGRO Profitability
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