14 bdo thames valley – business barometer 2
A quarterly street-level view of business sentiment ...
... helping to inform decisions on growth, investment and employment in the region
'The Thames Valley has been described by some of our survey respondents as the powerhouse of the UK economy and it certainly has been weathering the storm more confidently than other regions in the UK'
BDO, working in conjunction with the Twenties Club, is undertaking a quarterly barometer for businesses operating in the Thames Valley to measure how businesses are feeling about the economic conditions, and to provide an opportunity for businesses to benchmark themselves on areas of performance, recruitment and investment. 85 Thames Valley businesses participated in the Barometer 2 survey which opened on July 2 and ran for two months. The Barometer also includes a number of in-depth profiles of Thames Valley businesses including in this quarter: CH&Co, Peter Brett Associates, Regus UK, Romans and SAS UK. These companies shared their perspectives on their own performance, the key challenges they face and the prospects for the Thames Valley region.
Julian Frost, partner and head of BDO in the Thames Valley
Despite the glow generated by the Queen's Diamond Jubilee, the London 2012 Olympics and the Paralympics, UK business confidence hit a 20 year low in August according to the BDO UK Business Trends report which measures optimism among businesses across the UK. The brief resurgence seen earlier in 2012 when confidence reached a high of 98.0 on the Optimism Index plummeted to 89.1 in August, the lowest level since 1992 when comparable data was first tracked. Confidence levels and UK economic prospects have been following a somewhat zigzag path.
Economic confidence - dipping slightly
When it comes to the Thames Valley, the Barometer 2 survey indicates that optimism and business confidence remains higher in the region than for the UK as a whole. In the Thames Valley, the results remain tentatively positive. Overall economic confidence in the Thames Valley dipped only slightly from last quarter, with 73% saying that the economy has improved or remained the same compared to 82% in the previous quarter.
'However, we too are seeing evidence of a zigzag path to recovery, with a greater degree of caution, more muted confidence and lower expectations of growth than we reported in Barometer 1.'*
CH&Co admits that consumers are still quite cautious about spending. Regus sees the single major blocker to growth as the availability of finance, which for Regus’ clients is no easier now than when the recession started. But, on a more positive note, Romans sees developers increasingly able to fund new developments and projects. Peter Brett Associates is seeing clear indications of growth in housing, large infrastructure and energy sectors. SAS UK is seeing increased demand from organisations looking to harness its technology - leading to more career opportunities becoming available.
New business pipelines and turnover are increasing in the Thames Valley - with some levelling out expected
More than half (54%) state that new business pipelines and order books are increasing and, although this is down 10% from the last Barometer, it is still a very positive result. There is some levelling out in terms of expectations for the next three months, with approximately one third of companies forecasting no improvement in turnover or profitability in the next quarter.
Investing in people
The Barometer finds Thames Valley businesses are investing in their people, in terms of headcount, and in training and development, and have a very positive attitude towards apprenticeships and work placement schemes. Headcount has increased for 40% of respondents this quarter and is expected to increase at a similar level (42%) in the next quarter. The single biggest area for business investment is training and development (38% of respondents).
*Barometer 1, April/May 2012
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2012
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