Financial recovery in rural economy has taken root, reports CLA survey

Business News from the Fenland Citizen, fenlandcitizen.co.uk, @FenlandCit on Twitter
Business News from the Fenland Citizen, fenlandcitizen.co.uk, @FenlandCit on Twitter
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Farming businesses are looking forward to a profitable 2014 with expectations sales and profits will be higher than the previous 12 months, according to the CLA’s latest Rural Economy Index (REI).

The survey, produced in conjunction with rural surveyors Smiths Gore, reports that financial growth has spread from non-farming businesses to the farming sector during the final third of 2013, with more farming businesses reporting rising rather than falling sales for the first time in a year.

Agricultural businesses expect profitability to be higher in the next 12 months, the first time this has been recorded since the second quarter of 2012, with the net balance rising to 11 percent. Profit expectations for non-agricultural businesses have risen by a record net balance of 48 percent – their highest levels since the survey began in 2012.

Rural businesses, such as property and tourism enterprises, reported a more positive outlook with farm businesses expecting to employ the same number of people as last year, while nine percent more non-agricultural businesses now expect to employ more people.

CLA East Regional Director Nicola Currie said: “It is good news that recovery in the rural economy is now firmly rooted and we can look forward to 2014 with greater confidence.

“For most farming businesses, the pessimism of the last year has gone, and they are now looking forward to higher sales and profits in the next year.

“This is welcome news for the eastern region’s rural sector, which had seemed in the doldrums at times during 2013 with confidence hit by bad weather, poor harvests and the rising price of livestock feed. However, the full impact of the latest flooding in coastal areas has yet to be accounted for.

“In order to keep confidence high and to drive the rural economy forwards, the CLA believes the Government needs to implement the MacDonald task force recommendations fully. This will reduce the negative impacts of over regulation, so that farmers are not faced with unnecessary legislation. It also needs to put in place a broadband infrastructure that is effective, affordable and available to all.

“The economic health of rural communities and their businesses is being damaged by exasperatingly slow broadband that leaves them unable to compete. Broadband is as vital as water, electricity and gas and should be looked on as the fourth utility, and for rural businesses to flourish more progress needs to made.

“The CLA is very concerned that despite significant funding many rural areas are still going to be left without workable Broadband after 2015, and, as a result, we will continue to lobby Government for more support for connectivity to rural areas.”

Smiths Gore’s Head of Research Dr Jason Beedell said: “Business support is very important to sustain the recovery, and the investment strategies being prepared by Local Enterprise Partnerships (LEPs) right now must support rural businesses.

“Rural businesses need to understand this funding and work with their LEPs to ensure it supports them. The rural economy is significant – with 28 percent of all British businesses and a quarter of the population.”