Business confidence has hit a 20-year high, boosting hopes that the economy will continue to grow strongly this year. Firms across the country expect profits, sales and orders to increase in the next six months, and have the intention to spend more on new equipment after being more cautious during the economic downturn. (read more about equipment leasing)
Optimism has increased in all regions of the UK, (read more about local economies and leasing) among companies of all sizes and sectors, according to the latest Lloyds Bank Business Confidence Index, which surveys 1,500 firms. Since January 2014, the Index has risen 8 points to 53%, which is the fifth time in a row that there has been an increase. The Index is now higher than it was at its peak point of 46 in January 1994.
Expected capital expenditure is on an upward curve with the net balance rising for the fifth survey in a row. (read more about the benefits of leasing capital equipment) The report shows that a third of businesses (33 per cent) expect to increase their capital expenditure over the next six months while just over one in ten (11 per cent) are planning cutbacks. This results in a net balance of 22 per cent planning to ramp up investment in the second half of the year, which is an increase of six points from January this year and the highest level witnessed since 1994. The net balance has been in positive territory for four consecutive survey periods, for the first time since 2006. (read more about budget changes to the Annual Investment Allowance AIA)
Two in three firms now expect an increase in orders over the next 6 months, with only one in 20 fearing a decline. The balance of firms anticipating greater scope for increasing prices over the next six months has increased marginally by one point to 24 per cent. This is the highest balance since 2008 when it averaged 33 per cent. Firms’ hopes of raising prices may help to underpin their expectations of stronger profits over the next six months
Almost half of all businesses expect to increase sales to Europe, while just 8% think they will sell less.
Almost a third intends to add to staff numbers, suggesting further reductions in unemployment are also on the horizon.
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