24 bdo thames valley – business barometer
A street-level view of business sentiment in the Thames Valley ...
... helping to inform decisions on growth, investment and employment in the region
'Despite a slight drop in optimism amongst business leaders, the results for the Thames Valley remain robust'
Simon Brooker, partner and head of BDO in the Thames Valley
Accountants and business consultants BDO LLP, in conjunction with marketing specialists C8 Consulting, have published the results of the seventh Thames Valley Business Barometer. Taken from a survey of the region’s business community, this regular report provides a snapshot of business sentiment across the Thames Valley and has created a picture of emerging trends over the past few years.
The latest survey ran for six weeks during October and November and included in-depth profiles of five Thames Valley businesses: SIRE Technology, Oxford Products, Mabey, Ancoris and Softcat and a roundtable discussion of the results by members of the Barometer Panel.
Business confidence cools
This time last year we witnessed a surge in optimism across the region as confidence amongst the region’s business leaders leapt from 31% in the spring of 2013 to 79% by the autumn and then continued rising to 90% by the spring 2014 survey. The latest results indicate that this momentum is cooling with optimism dropping to 70%.
This drop in optimism is also mirrored in BDO’s latest national Business Trends report which showed a fall in the BDO Optimism Index and Manufacturing sub-index between September and October 2014. Businesses were primarily concerned with the global economy, the near-term future of which currently remains very uncertain. Manufacturing companies were more prone to these concerns than those in the service industry due to their greater dependency on exports and therefore their greater exposure to global economic conditions.
Overall however, despite a drop in most indicators, the Barometer results for the Thames Valley remain robust. In particular, profits are positive and expectations for profit over the next six months are extremely good. Pipeline and turnover have increased for the majority of businesses with 70% of respondents telling us that their business pipeline or order book had increased and the same percentage saying that their turnover was up. 80% of respondents expected turnover to increase between the autumn survey and spring 2015.
Is recruitment an inhibitor to growth?
Since the Barometer began we have witnessed a gradual increase in the headcount and hiring intentions of Thames Valley businesses as the economic outlook and business confidence have improved. In our previous survey, carried out last spring, 61% of those surveyed had increased their headcount during the previous six months while 71% were intending to do so within the next six months. Results from the current survey however show that only 50% of those surveyed had actually increased their headcount and 59% intend to do so in the next six months.
The challenge of recruitment and retention is a major issue for UK businesses. For a while now we have been hearing that there is a skills gap in the market, particularly amongst businesses in the technology and manufacturing sectors. Are we starting to see this becoming a major inhibitor to growth? It will be interesting to see how this pans out in 2015. In our spring survey we will be taking a closer look at the workforce to try and build a clearer picture of this vital ingredient of all businesses.
www.businessmag.co.uk THE BUSINESS MAGAZINE – THAMES VALLEY – FEBRUARY 2015
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