16 bdo thames valley – business barometer q1
A quarterly street-level view of business sentiment ...
... helping to inform decisions on growth, investment and employment in the region
"Firms are exhibiting lower levels of confidence in the economy as a whole…while those we surveyed are more confident when it comes to their own success"
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. The Q1 Barometer survey opened on February 14 and ran for six weeks. The theme this quarter is Financing the Business and Funding Growth. The Barometer includes a number of in-depth profiles of Thames Valley businesses including in this quarter: ByBox, Camp Hopson, Erento, Hewland Engineering and Imago. These companies shared their perspectives on their own performance during the past three months, the key challenges they face and the prospects for the Thames Valley region.
Healthy growth, surpassing earlier expectations
The Thames Valley still seems to be bucking the trend against the sombre growth forecasts for the UK as a whole for 2013. In Q1 2013, Thames Valley businesses are confident when it comes to their own success. The overall results have become more positive, with healthy increases and solid expectations on turnover and profit growth. Almost two thirds (65%) of businesses surveyed have increased their turnover in the past quarter compared to 46% in Q4 2012. The two thirds compares to the 47% who had expected turnover to increase when we asked this in Q4 – so for many, expectations have been surpassed.
Economic confidence - flattening
However, macro-economic conditions remain tough, with Thames Valley respondents increasingly cautious when it comes to economic confidence. Nearly half (49%) felt that the economy was flat versus 40% in the Q4 Barometer. High street retailer, Camp Hopson, one of the companies profiled, admitted that the environment was certainly challenging and that along with other retailers, it is battling with a reduced propensity for people to spend money.
Positive movement on headcount - consistent with previous Barometers
Responses relating to headcount throughout the past 12 months consistently tell us that around 40% of respondents are increasing headcount, and a similar or higher proportion are holding headcount steady. Our Q1 Barometer reinforces this once more. Hiring intentions appear strong and we are seeing even greater optimism for the next quarter. New start-up Erento profiled in our findings is focused on building its team and improving headcount in 2013.
It would seem then that where recruitment is concerned the Thames Valley is very much in line with the national picture. In BDO’s latest national Business Trends report, the BDO Employment Index has hit a 19-month high indicating a resurgence in private sector hiring intentions. The Index, which measures businesses’ hiring intentions over the next two quarters, reached 96.0 in March, the highest since August 2011. This is the third consecutive month that the Index has been at or above the crucial 95.0 level that indicates employment growth.
This quarter we focused specifically on the availability of finance and funding options. What we saw was evidence of a greater range of experience. On the availability of finance the majority view is that the underlying position has remained the same as in previous Barometers. A slightly increased proportion are finding the availability of finance easier, and likewise an increased proportion are finding finance more difficult to come by.
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – MAY 2013
Availability of finance - no real change, but a greater range of experience
Simon Brooker, partner and head of BDO in the Thames Valley
This is the first Thames Valley Barometer since the Budget 2013. Interestingly, the findings from the Barometer suggest firms are exhibiting lower levels of confidence in the economy as a whole. The region’s businesses are very willing to play their part by investing to help kick-start the economy. However the chancellor needed to send stronger signals that this investment will be rewarded.
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