Business confidence returns, but are all sectors feeling flush?
As soon as economic figures revealed the UK was out of recession and had avoided a triple dip attention turned to business confidence. But while a new survey suggests there is an upswing, there is still room for caution.
Despite the continued slow growth, the quarterly Business Confidence Monitor released by a professional body for accountants, says confidence is at its highest level since 2010. The upswing will continue, the results reveal, for the second quarter of the year. Based on official figures, the UK economy grew by 0.3% in the first quarter of 2013.
The survey comes from the trade body for accountants, the ICAEW and Grant Thornton, the consultants. They claim that the business confidence of their members will have a beneficial effect on the economy. They predict that growth will increase to 0.6% in the second quarter. The power of positive thinking.
While the survey suggests business confidence is filtering through every sector, there is still room for caution. Growth remains fragile and consumer spending is still putting the brakes on high levels of investment and rapid growth.
In the same week, figures released by the Association of Serviced Apartment Providers suggests the first quarter was challenging for many operators in the sector. Average overall occupancy in London from January to March was 77%. In January the figures was 72%. For the rest of the UK the figure rose to 75%. Weekly average rental income was a healthy £1102 which was an increase on 2012. The survey by ASAP asked its 58 serviced apartment operators in the UK and Ireland who have a combined portfolio of 12,000 apartments.
The slow start to the year belies an optimism that business is picking up in the second quarter of the year. It also reflects the trend that business operation is shifting, and serviced apartment operators, like Clarendon, have had to shift the way they work and their expectations of business.
Clarendon Serviced Apartments works extensively with the business community. Its portfolio across London – in the West End, The City and further into the south west like Staines-upon-Thames – means it is well placed to understand how the downturn has affected booking patterns and what that means for providers.
The survey results suggest London is not out of the woods yet, but confidence is returning, which is good news. However, Clarendon has spotted that buying patterns and trends are shifting. Fewer firms are willing to book ahead. This is partly due to a lack of confidence and a concern that projects in the pipeline might not come to fruition. The downturn means many businesses are feeling bruised. They are less likely to take risks and commit to an outlay of money without assurances their income will receive a boost.
However it is not all doom and gloom. The first anniversary of the Olympics is just around the corner. With the full 12 months of figures post-Games it will become much easier to see what kind of impact there has been on business.
The economy is still in a period of flux, even though confidence is returning to some sectors it still needs to be felt in every corner of the business community. With that in mind there is still room for caution.