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May 2006Despite the recent increases in unemployment and the perceived layers of red tape, research completed for the East of England Development Agency (EEDA) reveals many companies in the region are increasingly optimistic about their future economic prospects.
The survey, conducted by the CBI on behalf of all regional development agencies, found more companies in the East of England believed the overall business situation will improve in the next six months compared with the previous six months. This is backed up by firms seeing an increasing trend in orders over the last year.
Companies in the East of England continue to believe they offer a high level of training for their staff but when asked to name what inhibits the growth of their company, the majority of businesses still highlighted the shortage of skills, as well as red tape, as a major factor.
The East of England also had one of the highest levels of companies with websites, with businesses in the region using the internet to place and receive orders at one of the highest rates in the UK but surprisingly only eight per cent of companies had research & development links with universities which is slightly below the national average.
David Marlow, chief executive of the East of England Development Agency, said: 'I am encouraged to hear businesses are feeling more optimistic about their economic prospects for the future and it is something we have picked up in our own research. Overall we have seen signs of confidence in the region's economy despite the recent unemployment statistics.
'In all the facts and figures, I am most interested by the relatively low number of companies who have R&D links with universities in our region. Given the world class institutions within the East of England I find this disappointing, especially considering the focus there is on research and development in our region's businesses. It is certainly something EEDA will look into to see if this reflects a real under use of our knowledge based assets in the region.'
Richard Tunnicliffe, regional director for the CBI in the East of England said: 'The prospects for the East of England economy are brighter than they were six months ago but at the same time, firms face a tighter squeeze on profits from higher energy and staff costs. Growth is also split across sectors so whilst finance and the services thrive, growth for retailers and consumer services is subdued.
'There are also signs that the long-awaited upturn in manufacturers' fortunes could be underway but growth still falls short of rates we saw a few years ago and cost increases may not just damage profits, they could also hamper longer term investment and growth.'
The survey of 3,100 businesses nationwide took place between March and April this year and comprised a postal questionnaire covering all areas of the economy including the public sector.
A copy of the full report is available here.
This report outlines the results of the sixth UK Survey of Regional Economic Trends. Experian Business Strategies conducted the survey on behalf of the CBI, all of the English Regional Development Agencies (RDAs) and Scottish Enterprise. The first survey was conducted in March and April 2003.
About EEDA
The East of England Development Agency (EEDA) is the driving force behind sustainable economic regeneration in the East of England: Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk. The vision is for the East of England is to create a leading economy, founded on a world class knowledge base, creativity and enterprise to improve the quality of life for all who live and work here.
About the CBI
The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. Member companies, which decide all policy positions, include:
- 80 of the FTSE 100
- some 200,000 small and medium-size firms
- more than 20,000 manufacturers
- over 150 sectoral associations