Rural businesses primed to invest as the economy picks up

Data from the Rural Economy Index (REI) for the first half of 2014 shows more farming and non-agricultural businesses are expecting to increase investment in the next 12 months.

For agricultural businesses, optimism is up six per cent reaching a net balance of plus 42 per cent - the highest high since the survey started – as the farming sector continues to recover from its dip in 2012.

Two years ago saw Britain experienced its wettest summer for 100 years. The Great Yorkshire Show was cancelled after one day and it was reported that the abysmal conditions cost the UK’s rural businesses at least £1bn.

But so far this year, with weather conditions much kinder, more farming businesses say they expect to invest further in their businesses – a net balance of plus 36 per cent, up from six per cent, the survey carried out by the Country Land and Business Association (CLA) and Smiths Gore found.

Non-agricultural businesses have also become more positive about business investments, with a net balance of plus 46 per cent expecting higher investment in the next 12 months - again the highest level recorded by the REI.

Dorothy Fairburn, the CLA’s regional director for the North of England, said the survey findings were good news for the region’s rural economy.

“We certainly seem to have turned a corner in terms of economic recovery in the rural north and the level of planned investment highlighted by this survey will further improve confidence. Farm businesses are gradually recovering from a challenging 2012, and are looking once again at development projects, such as redundant building conversions, that were shelved during the downturn.”

Dr Jason Beedell, head of research at Smiths Gore, said: “Just under 40 per cent of the non-agricultural rural businesses reported higher sales over the past six months and 58 per cent expect sales growth next year - fantastic news for the rural economy as a whole.”