Insight from David Thomson, CEO.
Heading towards recovery
The Chancellor announced in the last quarter that Britain is further along the road to recovery than other EU countries, and that austerity measures have indeed led to economic progress.
However, he also admitted that the path ahead won’t be without its difficulties, something which won’t come as a surprise to small business owners across the UK, many of whom are still finding it incredibly tough to expand their business in any way.
Business Barometer
The most recent Close Brothers Business Barometer has shown that half of small firms in the UK say trading conditions are no better or worse than they were a year ago, and 22% say that while they are progressing with plans for growth, it is considerably more difficult than usual.
Positive signs
We’ve seen some good news on the jobs front from the Office of National Statistics in May, with the announcement that UK unemployment fell by 57,000 to 2.51 million in the three months to May.
News like this shows that recovery may indeed be taking hold at last. It’s encouraging that while austerity measures remain very much in place, the private sector is willing and able to create employment.
Our Business Barometer seems to support the theory that employment will continue to rise, albeit at a fairly slow pace – more than a quarter of SMEs told us they plan to increase their headcount with a mixture of full, part time and freelance appointments over the next 12 months.
Robust momentum
Overall, the economic outlook is somewhat positive, with green shoots emerging in many of our key sectors.
At the forefront of this recovery is the services sector, which accounts for around 75% of the economy. I was impressed to learn that it grew at its fastest for more than two years in June.
This data is arguably the strongest sign yet that the UK economy is finally getting stronger after a long, slow path from the global financial crisis.
The manufacturing industry is another leading light, having grown by 0.1% in May, its third successive rise. In fact, respondents in the Business Barometer named manufacturing as the single sector most likely to lead the way back to prosperity.
There’s a while to go before strong and sustainably recovery is achieved, but it is heartening to realise that we may just be on that path at last.
