By Claire West
Levels of confidence and investment in UK businesses are soaring according to the findings of a survey by asset finance provider Lombard.
More than two thirds of businesses (67%) with a turnover of £2m to £25m are showing higher levels of confidence in the UK economy than they were a year ago, with the highest confidence levels in the manufacturing and leisure sectors.
And businesses are keen to invest, with the average size of investments increasing by 20% in the past 12 months. Half (50%) of businesses say they are investing to secure future growth and a further 27% are spending to replace ageing equipment.
The survey, which was carried out after the recent General Election also reveals the objectives behind investment decisions. For businesses which are investing, 84% are doing so to increase turnover/profit, 83% are aiming to maintain a competitive edge and 80% are looking to boost efficiency.
The most common asset that businesses are investing in is IT and technology equipment, with nearly seven in 10 (69%) of firms which are spending choosing to invest in them.
An appetite for technology and efficiency is also reflected in the fact that more than two-thirds of respondents (67%) think their business would benefit from innovation in technology, with 62% believing that better technology would increase their company’s efficiency levels.
In addition, 63% of respondents believe the Government could do more to promote regular business investment by proving more tax advantages for those who invest, while 78% feel the Government should do more to support them in encouraging ongoing investment in new technology.
Commenting on the results, Ian Cowie, Managing Director, Lombard Asset Finance and RBS Invoice Finance, said: “It is heartening to see that businesses recognise that investment drives areas such as competitiveness and efficiency, both of which are key to securing sustainable growth in the economy.
“Of those businesses which are investing, two thirds are spending more than a year ago, and within this new technology is at the forefront of spending plans, with IT and technology assets the most common items purchased. Again this demonstrates a desire among UK businesses to keep up with innovation to drive further growth.”
A regional breakdown of the survey results show that the South West is the region with the highest levels of confidence in the UK economy compared to a year ago (73%), while growth in investment is most pronounced within the healthcare and professional services sectors.
Ian Cowie added: “This survey provides a real opportunity to analyse how different regions and industries are reacting to a continuing improvement in the economy and it is encouraging to see an overall positive position and outlook.”