Confidence in UK economy returns – good news for franchise business
It would seem that the first domino in the line towards economic recovery in the UK has been knocked down.
Mark Berrisford-Smith, senior economist at HSBC, confirms: “The economy in the third quarter will be bigger than it was in the second quarter, and that will be the first time it [the economy] has grown since the start of 2007.”
- Cathryn Hayes – HSBC Head of Franchising
While it would be foolish for businesses to become complacent, positive signs pointing towards growth are surfacing once more.
Clearly this is good news for the UK franchise sector which has weathered the recession better than many.
Of course, businesses across various sectors will improve at different speeds, depending on factors like demand or levels of government assistance.
Rising consumer confidence
One industry leading the way in the UK is retail. With low interest rates and low mortgages many people in the UK have more cash available to them month on month, and while some of this is no doubt put away into savings, much is being spent at retailers up and down the country.
Berrisford-Smith adds: “Many are much better off now than they were a year ago because of interest rates and low mortgages. This is putting hundreds of pounds a month into some people’s pockets, and while some of this is being saved rather than spent, it is making a difference.”
Further, the retail industry is being helped by a bolstered consumer confidence, driven in the main by a level of job security today that is an improvement to that of 12 months ago.
Willingness to spend
“Though a lot of people have lost their jobs the rate at which this is happening is slowing down, so people are less worried about losing their jobs now,” explains the senior economist.
A willingness to spend is also boosting the hotel and catering industry, and where people may have been reluctant to splash out on meals and overnight stays in the past, the confidence to spend is returning.
“Hotel and catering as a sector is improving as well, suggesting that people are slightly more confident about spending their money on going out to restaurants and staying in hotels,” Berrisford-Smith comments.
Business travel increases
An upsurge of corporate travel in recent months is another huge indication that business is improving in the UK, as companies are beginning to go out looking for new opportunities, rather than merely concerning themselves with staying afloat.
The desire to expand or pursue new opportunities would only come at a time when companies are confident that the market they are working within is providing enough opportunities for them to prosper.
“We are seeing more business travel as well, as companies are starting to think about investing and going out to win new business rather than battening down the hatches,” adds Berrisford-Smith.
Steady economic recovery
Going out and looking for business is definitely a positive sign, but for Berrisford-Smith there needs to be a slow and steady approach to the economy’s recovery with patience required while access to finance improves further.
“Access to finance for those businesses that want to start to grow once again will improve”, he stresses.
From retail to leisure the signs of economic recovery are evident through people spending more money and businesses going in search of new opportunities.
Tags: cathryn hayes, franchise business, hsbc, uk economy
December 3rd, 2009 at 2:35 am
Encouraging information for those wishing to start a franchise. Good article.