Firms optimistic about future (From Gazette & Herald)

Firms optimistic about future

A NEW survey has revealed the region finance chiefs are expecting increasing growth for turnover, profitability and capital investment and stable employment growth.

While the Institute of Chartered Accountants (ICA) latest survey indicates that respondents are marginally not quite as confident about the economic prospects as a whole facing their firms in the coming year compared with the past year, many of the key indicators reflect a quietly optimistic approach.

David Dickson, chairman of the Institutes's SME group in Yorkshire and Humber, said: "Involved as I am on many levels with the availability and provision of finance, it is encouraging to see that 86 per cent of those questioned believe that access to capital has either stayed the same or has improved. "That, combined with the belief that contrary to the UK nationally, capital investment is set to rise in the coming 12 months, is key to ensuring the future prosperity and growth of the many smaller businesses which are such a major part of our regional economy."

With a confidence index score of -3.9, confidence levels among businesses in the region are 5.6 points lower than the national average.

The national survey of 866 chartered accountants working in business reports a UK confidence index of +1.7, down from +6.2 recorded three months ago. Yorkshire and Humber expects growth in key business variables to accelerate.

Turnover is expected to grow 5.6 per cent in the next 12 months, after reported growth of 5.4 per cent in the past 12 months, and profit is forecast to expand by 5.2 per cent after reported growth of 4.5 per cent.

These expected growth rates are 0.2 per cent above the UK average for turnover and 0.1 per cent above the UK average for profit.

Competition in the market place has also improved, with 29 per cent of respondents in the region stating the situation is "somewhat" or "much better" compared to just 18 per cent nationally.

Jane Broadfoot, the Institute's regional manager for Yorkshire and Humber, said: "It is disappointing that as a whole, our regional financial professionals are somewhat less confident than the national average.

"However, linking the latest findings of the business confidence monitor to our work with Yorkshire Forward, the Regional Development Agency on the key objectives for the regional economic strategy, does seem to indicate that there are areas which are certainly working.

For example, Better Deal for Business provides unified access to the business support network, eliminating the "wrong door" approach which some businesses have complained about before when accessing the large number of agencies providing support.

This is backed up by the establishment of the Regional Skills Partnership and specific skills development initiatives.

"The encouraging news is that employment growth is expected to remain near stable, with expected payroll increases of 2.2 per cent over the next year, following a net increase of 2.1 per cent in the previous year. This compares with a marginal slowdown in UK employment growth nationally from 1.8 per cent to 1.7 per cent."

Updated: 11:22 Wednesday, June 08, 2005