Rural firms start to grow

CONFIDENCE in non-agricultural rural businesses are on the up, but farmers are suffering due to adverse weather conditions according to experts.

CONFIDENCE in non-agricultural rural businesses are on the up, but farmers are suffering due to adverse weather conditions according to experts.

Business confidence in the non-farming rural sector is growing, proving the countryside is starting to emerge from the recession, says the CLA in the North.

The results of the latest CLA/Smiths Gore Rural Economy Index (REI) show that optimism for non-agricultural rural businesses is up with sales, profits, investment and employment expected to be higher in 2013.

CLA North regional director Dorothy Fairburn said: “The outlook from the latest REI is positive for non-agricultural businesses.

“However, 55% of rural businesses that use lending report that borrowing rates have worsened, which of course could slow their economic recovery.

“In contrast, confidence and sales in the agricultural sector are significantly down on the start of this year due to adverse weather conditions.”

Rupert Clark of Smiths Gore added: “There has been a shift in the market with a fall in sales and profitability for many farming businesses because dreadful weather during 2012 affected the harvest and caused difficulties for next year’s crops.

“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 quarter 3, 45% reported higher sales over the past six months, up from 31%.

Despite the rural economy showing signs of recovery, the impact of this year’s bad weather on agriculture was plain to see in the figures from Quarter three, with 47% of agricultural business predicting a drop in profitability over the next 12 months.

 

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer