Confidence among West firms is far higher than for those in most other parts of the UK and is almost back to pre-recession levels, according to a new report.
Confidence is sharply up on a year ago and now stands at +35.9, well above the UK national average of +31.7 and the highest since the monitor began.
West companies have reported robust growth over the past three months with annual turnover up by 4.9% while gross profits have increased by 4.8% over the same period.
These rates are faster than those seen in the region over recent quarters. In line with high confidence in the area, businesses expect growth to accelerate. Over the coming 12 months, turnover and gross profits are expected to grow by 6.4% and 5.6% respectively. This would represent the highest expectations for these indicators since early January 2008.
ICAEW regional director Jon Blake said: “This quarter’s report shows that the UK economic recovery is well underway. If it continues at this rate, the UK economy will be one of the fastest growing economies in the western world in 2014. However we cannot be complacent and all of us need work hard to maintain the momentum built up this year while remaining alive to the threats to our recovery, especially those outside the UK.”
Exports have increased by a robust 5% over the past year and domestic sales have broadly kept pace, rising by 4.1% over the same period. These figures are expected to strengthen further, with 6.6% growth in exports and a 5.8% rise in domestic sales predicted over the next 12 months. These figures suggest that economic growth in the region will be balanced coming from an even mix of domestic and overseas demand.
Grant Thornton South West managing partner John Golding said: “This has been another very positive quarter for the region’s economy. Exports are crucial to the UK’s nascent recovery, and in the South West our exporters have had real success trading with both established partners and emerging economies. There are encouraging signs that their ambitious overall export predictions will be met.”