Market Intelligence Report
CLA / Smiths Gore Rural Economy Index Q1 2013 Key points •
Rising unemployment, shrinking profits and plummeting confidence has thrown the rural economy to the brink of a further recession.
•
Agricultural businesses are faring worst. The optimism they had in 2012 has gone, due to bad weather, poor harvests and the rising price of livestock feed. The Index’s measure of optimism has fallen by 40% compared with this quarter last year. Their sales have fallen in the past six months and they now expect orders, sales and profits to be lower in the next 12 months. They anticipate employing fewer people. All of the eight indicators fell compared with 3Q2012.
•
Non-agricultural businesses are also less optimistic although they still expect higher profits in the next year despite their actual sales shrinking over the last six months and the number of business enquiries falling. Hopes for higher employment also faded with fewer non-agricultural businesses expecting to employ more people in the next year. All eight of our indicators fell. This points to weaker growth in a stagnating economy. 36%
34%
32%
31%
29% 26%
25%
29% 26% 18%
11% 11%
9%
9%
15% 10%
9% 6%
7%
10%
1%
11% 10%
9%
-1% -7%
-9% -14% -14%
-16%
-12%
-5%
1%
-3% -2%
12%
9% 4%
0% 0% -3% -3%
-5%
-5%
11% 11%
9%
9% 6% 4%
6% 3% 0%
5%
16%
3% 2%
-5%
-9% -13% -17%
-24% -28%
... your actual sales over the past 6 months
... business enquires over the past 6 months
... your profitability over the next 12 months
... your optimism for your business over the next 12 months
Q1 Q2 Q3 13Q1 Agricultural business (green)
... your expected sales in the next 12 months
... your expected order book in the next 12 months
Q1 Q2 Q3 13Q1 Non-agricultural business (blue)
Figures shown are net balances; an increase in net balance shows the proportion (or %) of businesses reporting a rise minus those reporting a fall.
... expected investment in the business in the next 12 months
... expected employment in the business in the next 12 months