Small firms confident of a strong start to 2013
SMALL businesses in the South West are confident of a stronger start to 2013 a new survey says.
Lloyds TSB Commercial's Business in Britain survey shows a jump in confidence as concerns over the euro area subside.
It said confidence continues to rise in the South West, driven in particular by stronger profit expectations and improvements in anticipated sales and orders, despite slow overall UK growth.
However, there were only moderate increases in employment and investment plans for the next six months in the region.
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The twice-yearly report, now in its 21st year, canvasses the views of 1,800 UK businesses, including 180 in the South West.
It shows optimism is at its strongest level since the economy came out of the initial recession in 2009.
The survey's key Business Confidence Index tracks businesses' views of likely sales, orders and profits for the next six months and presents an overall "balance" of opinion weighing the percentage of firms that are positive in outlook against those that are negative.
In the South West, the index has increased to 18 per cent from 16 per cent in July 2012.
This is due to a rise in expected sales and orders.
But employment and investment intentions only moderately increased, suggesting companies remain cautious about hiring prospects and capital projects.
Paul Spencer, regional director for Lloyds TSB Commercial in the South and West, said: "It is good to see that businesses in the South West have managed to work through the tough economic headwinds of the last couple of years and have a rather more positive outlook for 2013.
"Businesses are clearly feeling more optimistic about Europe and, after a poor 2012, we should see more demand and orders coming through from the continent over the coming months.
"However, many firms are still cautious and are not investing in increasing their head count or on key capital projects.
"Although this is understandable given uncertainty, many more could consider investing now.
"It will be improvements in competitiveness and market development that will ensure the UK economic recovery is sustainable and long lasting.
"Investing now could pay dividends for companies' profit margins in the future."