Confidence in rural economy higher than general economy, new CLA index finds

Confidence in the rural economy is higher than in the economy as a whole, according to the new quarterly CLA Rural Economy Index.

The Country Land & Business Association index – the CLA REI – surveyed 100 rural business members across England and Wales and found that only five percent had no confidence in the rural economy over the next three to six months - compared to 42 percent with the economy in general.

And although more than three-fifths - 61 percent - said they were "not very confident" in the rural economy over the same period, half of those polled (50 percent) still expected their firms to be able to perform according to their business plans.

Furthermore, 16 percent even expected their rural business to perform well with potential for growth over the next three to six months and 18 percent were quietly confident about the state of the rural economy over the same period, whereas no one surveyed felt "quietly confident" about the general economy.

CLA President Henry Aubrey-Fletcher said: "The first findings of the CLA REI have been surprising with only 66 percent of respondents stating that they feel not very confident or have no confidence at all in the rural economy compared to a more expected 97 percent when asked the same question about the economy in general."

He added: "The CLA is launching this quarterly economic indicator because the rural economy is often overlooked, despite the small businesses that operate in the countryside being the backbone of this nation's economy as a whole.

"There was no rural index in operation that will give an overview of the rural economy in England and Wales - something the CLA has changed today with the launch of the CLA REI."

Dr Charles Trotman, the CLA's Head of Rural Business Development, said: "The index is to gauge the level of confidence in the rural economy. Every quarter, we will survey 100 rural business members from a wide spectrum of businesses and regions.

"The results will be released in January, April, September and December and will give an up-to-date indication of the economic state of the rural economy."

The businesses surveyed include land-based enterprises, the service sector, shoots, tourism businesses, fishing, general leisure and office developments in the countryside.

The CLA members surveyed were also asked what they believed were the main obstacles to economic stability to their businesses and the overall economy. Answers given by the rural businesses included loss of income, poor cash flow, red tape and increased government legislation for employers, shortage of building materials, low commodity prices, and consumer spending levels.

In response to a final question asking what the Government should do to stimulate economic activity, answers included curbing the very high rates of interest levied by many credit card companies despite low base rates, reducing VAT to just five percent, stimulating the building of infrastructure in the countryside, freeing up borrowing for businesses and home buyers, reducing taxes and anything that boosted consumer confidence.

However, many rural businesses are feeling the pinch.

One of the members surveyed said there was a "lack of confidence in the sector in which my business operates and in the overall economy.  Government initiatives seem to be having little effect and there is a general feeling of despondency."

Another commented: "Companies need money to develop people and learn to manage and diversify and strengthen their existing business."

CLA REI web page: http://www.cla.org.uk/Policy_Work/Rural_Economy_Index/

CLA MEDIA CONTACTS:

For further information and interviews:

Oliver Wilson, Director of Communications, 020 7460 7936 or 07702 928828, ollie.wilson@cla.org.uk,

Phillippa Coates, Press Officer, 020 7460 7934, phillippa.coates@cla.org.uk

Out of hours: 020 7201 9511.

Dr Charles Trotman – Head of Rural Business Development

An economist, advises on rural economic issues, particularly food policy, rural tourism, equine issues and telecommunications policy.

Phone: 020 7460 7939
FAX: 020 7235 4696
Email charles.trotman@cla.org.uk