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Gloucestershire Business News

Business climate: is sunshine on the way?

Fresh insight on the business climate from financial advice experts Azets suggests a cautious optimism about our future economic outlook, with sentiment remaining closely correlated with business size and revenue.

The updated survey which collates more than 2,400 business views across the UK as well as Ireland, Denmark, Finland, Norway and Sweden, paints a picture of smaller firms constrained by resources and expertise, but with most remaining more pessimistic compared to their larger, better resourced counterparts.

No significant change is shown in the report when it comes to financial performance: the latest data on business financial performance ratings remain slightly above the average optimism score.

The Azets report said: "Larger businesses are surer of their finances than smaller ones, reflecting the trend on economic outlook."

The report added: "Overall, the sentiment among businesses continues to reflect a proactive stance on adapting to modern business imperatives, including digital transformation, cyber resilience, and sustainability. At the same time, businesses maintain a realistic perspective on external economic influences and fiscal prudence, with scores remaining virtually unchanged from the previous survey, indicating a stable and consistent outlook amidst ongoing challenges."

Business concerns are also easing across the board, with scores in the latest survey revealing "a business landscape where concerns have decreased across various dimensions compared to the previous survey."

Geopolitical uncertainty, however, remains the most pressing issue, though with a lower score.

"This suggests that while businesses are navigating a complex global environment, their apprehension has somewhat eased."

In other areas of the report, Azets notes that succession planning remains a blind spot, particularly in Finland, while cybersecurity incidents are notably on the rise: "An increasing proportion of company's report experiencing cybersecurity incidents in the last 12 months. However, the majority still report no events."

This could indicate a lack of awareness, rather than an absence of incidents, the report adds.

Azets' report lands as intense focus is likely this week on the latest unemployment figures, which are due to be issued tomorrow by the ONS.

In advance of the figures, which are expected to indicate that UK employment is rising, the Trades Union Congress (TUC) has pointed to data from the Organisation for Economic Cooperation and Development (OECD) which shows UK unemployment is rising at the fastest pace among 38 of the world's wealthiest nations.

Of the 38, only Costa Rica suffered a similar rise in the number of people losing their jobs between the start of January and the end of March.

‚óŹ ONS data showed the UK had exited recession in May , growing by 0.6% in the first quarter of the year, but research by the Chartered Institute of Management indicates that in the first three months of this year, more UK employers drew up plans to shed staffing numbers ad freeze recruitment than in the same periodof 2023.

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