The mood of optimism in the high street was also buoyed by reports from the top retailers Sears and J Sainsbury that trading is strong. Sainsbury has told analysts that sales are running 5 per cent ahead of last year's depressed levels.
Sir Michael Angus, president of the Confederation of British Industry, says in a new year message to members that prospects for recovery in 1993 are good, provided businesses do not allow improved competitiveness to be eroded by higher inflation and spiralling wage claims.
The British Chambers of Commerce also says that a framework for recovery is at last falling into place. Earlier this week, the Institute of Directors reported a sharp improvement in business confidence.
Sainsbury said yesterday that it had beaten its sales targets since the end of September. Sales have been boosted by the promotion it ran with British Airways offering discounts on flights for customers meeting spending targets.
Privately, Sainsbury has told City analysts that the 5 per cent rise in sales over the year to the four pre-Christmas weeks is over and above the benefit of new stores. With food price inflation falling to 2 per cent or less, that represents a marked acceleration in volume growth. Moreover, the growth is even more impressive because Sainsbury has been accepting credit cards and opening on Sundays for more than 12 months now, taking the one-off boost of these reforms out of the comparison.
Sears, which takes in Miss Selfridge, Olympus Sports and Freeman Hardy Willis, said that the winter sales had got off to a good start. Geoffrey Maitland Smith, chairman, said: 'Customers have become much more cost-conscious over the last two years and they see the sales as a real opportunity to get extra value for money.'
However, the more cautious retailers warn that the strong start to the post- Christmas sales may partly be due to the bright and sunny weather, compared with the wet weeks before Christmas.
Sir Michael Angus's statement says that the more competitive exchange rate is starting to feed through into improved exports, with order books at their best levels since June.
However, Sir Michael also sounds a note of caution, saying: 'With the competitive advantages of a lower exchange rate, lower interest rates and lower inflation, UK manufacturers are well placed to increase their market share. But it is essential that these advantages are not eroded by inflation. The firm control of costs, particularly pay bills, must remain a priority.'
Writing in the latest issue of the British Chambers of Commerce journal, Richard Brown, director of policy, says there is cause for optimism in 1993.
'Whilst the visible signs of recession remain, there must be cause for hope that at last a framework for recovery is falling into place and next year will fulfil the failed promise of this year, with the worst of recession behind us,' he says.
Businesses can look forward to a constructive Budget in the spring, further deregulation, help for exporters and the opportunities offered by the single market and the successful Gatt round.
There were also further signs of recovery in the United States yesterday as the index of leading indicators showed a rise of 0.8 per cent in November.
Another bleak year is in prospect for the freight industry with only 24 per cent of companies expecting to carry more goods in 1993 than this year, according to a survey by the Freight Transport Association.Reuse content