The latest Smith & Williamson Enterprise
Index revealed that confidence in the economy is on the
up with 73% of respondents expecting an upturn in the
economy.
The inaugural Index, carried out in January of this year, recorded
a positive outlook as far as the economy was concerned with a
benchmark score of 100, whilst the second quarter saw a slight dip
in respondents' optimism with the score dropping to 90.1.
However, it appears that the confidence felt by the UK's wealth
creators at the start of the year has returned with a vengeance
with June's Index score increasing to 103.3.
Since the last Index was recorded in April of this year, optimism
concerning the economy across a variety of factors has risen by
12.7%.
Reflective of this increase is the fact that an overwhelming 73%
of respondents expect the UK economy to improve in the next 12
months and the majority of the entrepreneurs we asked are
planning for either growth or acquisition over the next year.
Hot on the heels of a raft of optimistic data for the UK economy,
the positive sentiment that the Index has revealed correlates
strongly with all of the latest headline measures for the economy
that have shown that GDP is forecast to grow by 1.2% in 2013, that
the UK construction sector is showing further signs of recovery and
that housing activity, manufacturing and new car registration
figures are on the rise.
Most respondents welcomed the fact that the Royal Bank of Scotland
(RBS) has launched an independent review of its lending to
small businesses. RBS have hired former Bank of England deputy
governor Sir Andrew Large and management consultancy Oliver Wyman
to examine its lending practices and say that the purpose of the
review is to identify how the bank can improve its support to SMEs
whilst preserving thorough lending practices. The majority of those
surveyed believed that this should be a practice that all banks
take note of and replicate.
Staying on the topic of lending and lending practices, it is
perhaps not surprising that 90% of those questioned felt that
payday lending firms should be subject to greater regulation,
something that is expected to be decided on by the Competition
Commission by the end of 2014.
Despite the obvious appetite for growth and the belief that
headcounts will increase in most of the respondents'
organisations over the coming 12 months, very few of those asked
feel that the employment pool is adequately educated or
trained.
This is clearly a problem and, as the economy picks up, the UK
needs to produce more skilled and trained workers to maintain this
trend. As CBI research recently highlighted, over 30% of businesses
are frustrated by a lack of basic literacy and numeracy amongst
school and college leavers. In addition, 31% reported that young
people lack the technical skills they need.
Finally, the good news on the economy is not limited to our entrepreneurs; Britain's consumers have also become more optimistic than at any time since October 2009.
Disclaimer
By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.
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