Although the economy remains deep in the worst recession in 75 years, further evidence emerges today that somebusiness confidence is returning - usually a reliable indicator of an eventual recovery, if not necessarily an especially vigorous one.
The latest quarterly survey of business professionals, compiled by the Institute of Chartered Accountants in England and Wales, suggests that there has been a return of confidence among those shell-shocked by the collapse in demand since the economy stopped growing a year ago. The poll has registered declines for the past 18 months, but is now showing an improvement in the banking, finance and insurance sectors and the property market.
One in five business professionals questioned are still much less confident about the next year, indicating the recovery may be some months away.
Michael Izza, chief executive of the institute, said: “The rise in confidence is a positive step. The underlying data suggests that companies have heeded warnings, taking the right steps to ensure their businesses are positioned to survive the downturn.”
Mr Izza added: “While the change in outlook is encouraging, I still believe that difficult times lie ahead. I would urge businesses to not be complacent and be measuredinany steps they take in response to an economic recovery.”
Sentiment improved across all UK regions and counties for the first time since the survey began in 2003. The West Midlands saw the largest increase, which is thought to be a result of recent measures to help the auto industry, such as the scrappage scheme.
The North of England remains the least confident region, the researchers found. More than 1,000 chartered accountants were questioned for the study.