Rural businesses in the North are more confident and optimistic than they were three months ago, according to the latest results from the CLA/Smiths Gore Rural Economy Index Quarter 2.
Earlier this year, the Rural Economy Index for Quarter 1 showed that there was a threat of further recession for the rural economy and, while not out of the woods, the most recent results indicate that there are early signs of recovery.
While farming businesses are still contending with the effects of the difficult weather conditions in 2012, they are a little more optimistic than they were in Quarter 1.
Non-farming rural businesses are more positive than their agricultural counterparts. They are more confident about profitability over the next 12 months compared with farming businesses.
CLA North regional director Dorothy Fairburn said: “Quarter 1 was extremely negative and suggested the rural economy was heavily into recession following a winter far worse than anyone could have thought.
“However, we’re now seeing green shoots of recovery, but they’re still fragile. The agricultural sector does look like it’s picking up again.”
Jason Beedell, head of research at Smiths Gore, said: “Confidence is critical for all businesses and is often an early indicator of profitability. Confidence influences investment and production intentions.
“Our analysis of projected business performance shows, however, that there is a marked difference in the expectations of agricultural and non-agricultural businesses.
“There is evidence, albeit weak, that sentiment in the rural economy is on the cusp of change.
“While there is a long way to go before agricultural and non-agricultural businesses can claim that the economic revival has leaked out into the country, we can be cautiously optimistic.”