By Max Clarke
A new report has revealed that business optimism stands at its highest point since October 2009, but highlights the confidence chasm between cautious small firms and more confident, larger businesses.
The Business Tracker report, published by Regus, global workplace providers, includes an updated Business Confidence Index (BCI) and is based on the opinion of over 4000 businesses in the UK.
Rising confidence, the report suggests, is being matched by real results: a net 38% of UK companies’ revenues have risen in the last year, and 31% saw their profits rise.
“That business confidence is returning is good news for the UK economy as is the fact that so many companies are reporting rising revenues and profit,” commented Celia Donne, Regional Director at Regus.
However, significantly lower proportions of small businesses chalked up profit rises compared to large firms (26% and 51% respectively). Across all size brackets, the UK lags the US and all other major world economies according to each of the Business Tracker’s indicators.
“All firms are remaining cautious in respect to departmental spend,” continued Donne. “It would seem that they are only investing where there is a clear bottom line return, such as sales and marketing, whereas spending on property will continue to decline in 2011. This is a remarkable change on just a few years ago, when the combination of economic upturn and increasing employment would have generated a boom in traditional commercial property spending.”
UK companies remain cautious in their forward projections: over a quarter (27%) expect the economy to advance strongly in the second half of 2011, yet 60% do not expect momentum to pick up until the first half of 2012. 69% of companies expect revenue growth in the next 12 months. The forward-looking indicators of the report are roughly consistent across all size brackets.