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Glenn Athey

Trading conditions remain tough but 2010 heralds hope for businesses

4 March 2010

A report published by Insight East today shows that businesses in the East of the England are continuing to trade in tough conditions but over three quarters believe the economic climate will remain the same or improve in 2010.

The conclusions are based on findings from the National Business Survey (NBS), November 2009 and the latest East of England Quarterly Economic Brief, which is produced by the team of economic experts at the East of England Development Agency (EEDA).

The main conclusions from NBS relevant to the East of England are:

• Just over half of businesses (53%) in the region thought that their performance had at least remained the same over the last 12 months. 20% said it had improved
• Nearly three quarters (72%) in the region expected the business climate to improve in the next 12 months (November 2009 to November 2010)
• The manufacturing sector is the most confident – 32% expect the climate to improve, a 9% increase compared to June
• 70% of East of England businesses felt they were fairly well prepared or very well prepared to weather any further downturn.

Key points from Insight East’s Quarterly Economic Brief for October to December 2009:

• The East of England is performing in line with the recovery of the national economy and confidence is growing slowly
• Manufacturing businesses are being boosted by exports to world markets but investment is needed to ensure continued and future growth
• Investment in R&D has continued to be robust, underpinning efforts by businesses to bring new products to market and to compete globally
• The pace of job losses has slowed, but recruitment is still at a low level and men remain more likely than women to be made redundant, with younger and older workers being more vulnerable to redundancies
• The rate of unemployment in the region, at 6.7%, has changed little over the last 7 months and is significantly lower than the UK rate of 8.1% although more job losses should be expected
• Over half of firms are looking for new staff, and half of these are experiencing recruitment difficulties as skill shortages are starting to appear again
• The commercial property market has regained confidence both nationally and regionally, though the trend has been more muted in the East of England.

Glenn Athey, director of Insight East said:

“Battening down the hatches has been a common reaction to the previous year’s economic climate and conditions are still stormy for some.  The future is looking brighter with many firms more confident that the conditions will improve this year.

“It is encouraging to see businesses, especially those in the manufacturing sector, breaking new ground and exporting globally. International markets such as in China are underexploited and one of the few parts of the globe where exports have risen. 

“Critically, spend on R&D has remained robust but this, and investment in skills, must be maintained across all sectors to ensure rapid economic recovery and success.”

449 businesses in the region were surveyed for the NBS, one of the largest and most statistically robust of its kind. It is conducted by Ipsos MORI on behalf of the Regional Development Agency Network and Invest Northern Ireland. 

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