An increase in merger activity, continued low interest rates, and a range of government finance initiatives have resulted in a mood of cautious optimism within many firms across the region.
This has been supported by latest unemployment figures that reveal a reduced rate of 5.9% people being out of work across the South East.
When you factor in a sustained increase in property prices, upturn in the construction market and a reduction in corporation taxes, there are strong indicators of a wider mood of financial stability developing.
Both George Osborne and David Cameron have both admitted there “is plenty to do” on the economy in recent months, but the Treasury and financial observers have forecast modest growth as we move towards 2014.
While the Chancellor unveiled plans this autumn to create an economic surplus within the next parliament, his plans were criticised by the Institute for Economic Affairs, which claimed the government not done enough to pay down the deficit.
Despite this, South East Business has spoken to a wide range of companies across the region this year that have experienced a comparatively positive year.
Having met representatives from high street banks including Santander and Barclays in recent months, they have pledged to respond to claims that they have not leant in sufficient volumes to emerging and establish SMEs within Kent, Surrey and Sussex.
Consequently, organisations including the FSB have been continuing to lobby the government on finding a formula that promotes greater access to finance for businesses. According to a new study from ABM AMRO Commercial finance, two thirds of SME businesses will be looking to grow within the next two years.
However, it found that nearly half (44 per cent) of senior decision makers do not think they have the right people in place to reach their potential. Guy Walsh, of the company, said: “With the recent positive economic news, it’s great that SMEs are thinking about growth again. With renewed enthusiasm, the SME community can really help turn these new green shoots into a sustainable recovery.
“More than ever though, SMEs need the right people in charge, to think about succession planning and exit strategies for shareholders, have the right backing and a clear direction of travel if they are to turn their business ambitions into economic reality.”
According to Charlie Eve, partner in Worthing-based accountancy firm Carpenter Box, this year has in fact seen a strong performance for many companies.
He said: “What we have seen with regard to company’s finances is that there has been a little confidence surrounding the belief that the Bank of England is not likely to raise interest rates for the next couple of years.
“But we have seen a pattern of many companies entrenching and earning enough to keep themselves afloat, rather than looking to expand. “It’s been a case of some companies having over the past three years used up most of their financial pre-recession reserves and it is those firms who may start to struggle. “We also deal with a lot of companies who have actually found that profitability is up this year, including people in the construction, building and architectural professions which has seen a strong property market this year.
“With schools and colleges in our area selling off land for development, this has also created more confidence out there. “We have actually had one of our strongest ever years this year, which is good to see.
But I do think that the optimism at present is fragile - it only takes something like news of the loss of jobs at Portsmouth dockyard to create concern.”
In terms of looking ahead to next year, he said many businesses had greeted news of a reduction in corporation tax as an especially welcome measure.
This in tandem with practical measures such as many clients moving over to online cloud-based accountancy packages had proved hugely-successful in saving time, freeing the firm up to focus on valuable advisory work with businesses.