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Thames Valley businesses continue to weather the storm
measuring results business barometer
While UK business confidence hit a 20-year low in August, as reported in the recent BDO UK Business Trends report, the latest quarterly Thames Valley Business Barometer released last month shows that the region’s businesses are continuing to weather the storm more confidently than the rest of the UK
Julian Frost
Although overall economic confidence in the region dipped slightly during the summer period, results still remain positive with more than half (54%) of businesses stating that new business pipelines and order books have increased.
However, Thames Valley businesses are showing a greater degree of caution, with more muted confidence and lower expectations of growth than reported last quarter, eliciting a zigzag path of business sentiment. Looking forward, the Barometer indicates that there will be some leveling out in terms of expectations for the next three months. Approximately one third of companies forecast no further improvement in turnover or profitability in the next quarter.
In the latest Thames Valley Business Barometer, which is published by accountancy and business advisory firm BDO LLP and the Twenties Club, 85, business leaders in the region completed the survey. More than 70% of those surveyed stated that the economy has improved or remained the same, compared to 82% in the previous quarter.
Signs of investment by Thames Valley businesses are encouraging, especially in terms of recruitment intentions, training & development, and in positive attitudes towards apprenticeships and work placement schemes. Headcount increased for 40% of respondents this quarter and is expected to increase at a similar level (42%) in the next three months. The single biggest area for business investment is in training & development (38% of respondents).
Availability of finance is still seen as a major blocker for business growth. More than half (56%) of the region’s businesses believe that the situation has not improved, with many stating that obtaining finance is no easier now than when the recession started.
Superfast broadband was cited by 52% as most critical to Thames Valley competitiveness. Given downbeat forecasts of graduate unemployment, it is particularly interesting to see that nearly half (49%) of businesses also see investment in apprenticeships and work placement schemes as extremely important.
Julian Frost, partner and head of BDO
in the Thames Valley, comments: “Although there are some deep- rooted problems across the UK, our latest Barometer results demonstrate that the Thames Valley seems to be weathering the storm and is performing better than other regions. The Thames Valley has a strong entrepreneurial spirit, boasting 45,000 SMEs as well as many large multinational corporations. I think there is real determination, resilience and drive being displayed by many businesses here in the Thames Valley and that’s what the economy needs – confidence.”
The Barometer report includes a number of in-depth profiles of a cross section of Thames Valley businesses including CH&CO, Peter Brett Associates, Regus UK, Romans and SAS UK. These companies shared their perspectives on their own performance during the past three months, the key challenges they face, international opportunities and the prospects for the Thames Valley region.
Paula Elliott, managing director, C8 Consulting, comments: “The more organisations that get involved
Building societies to fulfil new regional banking role?
A new report from KPMG predicts that building societies are entering a renewed period of potential growth and success which could lead to them fulfilling a new regional banking role by the end of the decade.
KPMG’s 22nd annual Building Societies Database, which analyses the performance of the UK’s 47 building societies as at April 2012, highlights that the sector has remained resilient despite difficult market conditions, with 23 societies increasing their profit for the year.
This year’s report also shows that the total group assets of the 47 societies have grown to £315.4 billion, compared to £306.2b in
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2011’s analysis. This increase of £9.2b reverses the prior two years' contraction of £13.3b.
Richard Gabbertas, financial services partner at KPMG, commented: “I expect building societies to play a big role in the future of banking in Britain. In many respects it is their time to shine. By 2020 we could see building societies fulfilling a new role as regional banks, capitalising on their attractiveness to smaller businesses and to customers who value their service proposition. They will be able to look to supplement their range of straightforward savings and mortgage products with current accounts for personal and small business customers alike.
However, while the outlook for building societies looks positive, KPMG warns that the sector still faces a number of challenges.
Gabbertas concluded: “Like the banks, building societies are confronted by regulatory challenges, primarily the post- crisis drive for higher capital ratios as they face particular difficulties in raising fresh core tier one capital. Also, building societies are not immune to the ongoing difficult market conditions, including low interest rates and suppressed mortgage activity. However, their recent performance suggests they are well equipped to weather this storm for the foreseeable future.”
THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2012
in our Business Barometer, the more able we are to gauge what is really happening for businesses in the Thames Valley. We urge local businesses to share the results with their own networks – customers, suppliers, and partners - to encourage their participation which will extend the Barometer’s reach.”
The Thames Valley Business Barometer report can be accessed via the BDO LLP website (
www.bdo.
uk.com/press/bdo-thames-valley- business-barometer-launch). The next quarter’s survey will go live on October 1, 2012 for one month.
For extracts from the survey see page 14.
For more information and to register your interest in getting involved contact:
Karen Meenderink 0118-9254448
karen.meenderink@
bdo.co.uk
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