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Employment optimism not yet translating to growth


Business confidence continued to decline last month, as BDO LLP’s Optimism Index fell to its lowest reading since the report began 21 years ago. This is according to the latest Business Trends report by the Southampton-based accountants and business advisers.


BDO’s Optimism Index, which predicts business performance two quarters ahead, fell to 88.9 in January from a reading of 90.3 in December – the eighth consecutive month that the Index has remained below 95.0, the mark which indicates growth. This suggests the economy will struggle to grow in Q1 2013 which, following the recently-announced negative growth of Q4 2012, poses the risk of a triple-dip recession. BDO’s Output Index, which predicts short-run turnover expectations, also supports this, falling from 93.1 to 92.3 last month, further away from the 95.0 mark indicating growth.


Yet despite this business pessimism, there are signs of improving confidence. BDO’s Employment Index, which measures businesses’ hiring intentions over the next two quarters, rose to 95.1 in January from 93.0 in December, taking the Index above the 95.0 mark that indicates employment growth. It is the first time the Index has stood above 95.0 since April 2012 and supports the latest ONS Labour


Planning permission no longer needed for office to residential


Offices will be able to be converted to residential use without the need for planning permission under new change of use rights which come into force in spring.


However, before conversion can take place owners/developers will have to notify the local planning authority of their proposal, to enable it to ensure that the proposal does not have any significant transport or road impact, and would not take place in safety hazard zones or areas of high flood risk and land contamination.


The permitted development rights only cover change of use, therefore any physical alterations or additions to a building which currently require consent would continue to do so.


Business THE M A GA ZINE www.businessmag.co.uk TM


Peter Tanner, managing director of town planning and development consultants Tanner & Tilley, said: “We have clients who will benefit from this relaxation of planning control and make good use of vacant or under-occupied offices by converting them to residential accommodation, adding much- needed housing to the local housing stock.“


Market figures which saw unemployment fall back to 7.7% in the three months to November, down from 7.9% in the previous quarter.


Equally, the rallying confidence of manufacturers provides cause for cautious optimism, with both their Output and Optimism scores increasing this month. Optimism for manufacturing firms rose to 95.2 in January from 91.9 in December, while their Output Index score, indicating manufacturers’ order book strength, increased to 92.3 in January from 90.6 in December.


Malcolm Thixton, lead partner at BDO Southampton, commented: “In spite of a strengthening labour market, business confidence continues to weaken, and improved hiring intentions are not translating into growth plans. It seems the damaging effects on businesses of five years’ zigzagging economic growth has left them wary of making concrete plans for expansion and resigned to the ’new normal’ of economic stagnation.


“To end this cycle, it is imperative that the Government implements plans to expedite growth. Without growth incentives, we will continue to see UK businesses reluctant to invest and expand, which poses a grave threat to the UK’s economic recovery.“


£200m for commercial development in Basingstoke


Muse Developments has signed two development agreements with Basingstoke and Deane Borough council for the £200 million Basing View regeneration scheme. The scheme will build on the existing business park in Basingstoke by creating around 650,000 sq ft of commercial-led development over 15 acres, and include a mix of new office space, a business-class hotel and other supporting facilities.


The project has the potential to double the number of jobs currently available at the business park to around 10,000 in a decade.


The partners are working to reposition the estate, which will start with a £3.3m investment in the public realm and include improved connectivity to the town centre.


The work follows an announcement of £4.3m of government funding to improve junction 6 of the M3 and Black Dam roundabout. The funding from the Highways Agency has been awarded to support new jobs in the town.


Work on site is expected to commence mid- 2013, subject to planning approval.


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – MARCH 2013


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