Half full, or half empty?


There is mixed news out this week on the state of the south west business economy.

According to corporate finance specialists at accountancy firm Bishop Fleming, revived activity on company sales and acquisitions in the region, points to a commercial sector springing back to life.

However the latest Business Trends report from BDO LLP, claims a declining confidence among firms in the south west.

Bishop Fleming says it is currently working on ten major company transactions in the region, spanning both sales and acquisitions.

“This trend is encouraging south west business owners to re-visit the idea of selling their company”

Most of the current company sales are being driven by trade buyers, including US purchasers.

“This is a major change in the market,” commented Jonathan William, head of Bishop Fleming’s corporate finance team.

“For the past year and more, there have been very few company sales taking place, with a withdrawal of private equity and bank funding.

“Right now, we are seeing trade buyers – including US-based companies – taking the lead, without the need for bank or private equity funding. This trend is building across many sectors, including marketing agencies, aerospace & defence companies, and document out-sourcing businesses.

“And this trend is encouraging south west business owners to re-visit the idea of selling their company, as more sensible offers are now available.”

The report from BDO, however, says UK businesses, including those in Cornwall, can expect to see little economic growth over the next six months.

It says growth has been profoundly hampered by ongoing fragility in the manufacturing sector.

However, one bright spot for manufacturing employers is that wages continue to remain firmly under control, with year-on-year pay growth between March and May 2011 at 1%, compared with 2.1% across all sectors.

The services sector, while not declining like the manufacturing sector, has been hovering around 95 for both optimism (95.5) and output (95.3) for over a year, which, it says, points to zero growth in the sector for the rest of 2011.



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