The results of the latest rural economy index by the Country Land and Business Association (CLA) and land agents and rural surveyors Smiths Gore show that optimism for non-agricultural rural businesses is up with sales, profits, investment and employment expected to be higher in 2013.
Dorothy Fairburn, the association's regional director said the outlook from the index was positive for non-agricultural businesses but warned that borrowing rates had worsened which could affect their recovery.
Rupert Clark, of Smiths Gore, said: “If the weather in 2013 improves, we expect to see an increase in agricultural confidence as the underlying market fundamentals, of price and demand, are strong.”
Looking at rural businesses excluding agriculture in the third quarter, 45 percent reported higher sales over the past six months – up from 31 percent in the previous quarter; 56 percent reported higher business optimism for the next 12 months – up from just 20 percent in the previous quarter, and 48 percent predicted higher profitability over the next 12 months – up from 26 percent in the previous quarter.
Despite the rural economy showing signs of recovery, the impact of this year’s bad weather on agriculture was clear in the third quarter, with 47 percent of agricultural business predicting a drop in profitability over the next 12 months – up from 28 percent in the previous quarter.