Gresham Monitor reveals business confidence is at its highest since 2000

UK middle-market managers are more optimistic about the prospects for their businesses than at any time since July 2000. The results from the Gresham Monitor show that seven out of ten companies surveyed expressed a confident outlook, up from just four in ten 18 months ago.

The stated confidence is underpinned by the highest level of businesses reporting increased profits for four years and a significant rise in the number of companies with a growth in turnover.

The Monitor is a twice-yearly survey of UK middle market firms conducted by Gresham, the regionally-based UK private equity firm. The June 2004 Monitor is the ninth survey that Gresham has commissioned and looks at levels of confidence, financial performance, threats and opportunities for mid-market firms.

Highlights of the survey include:

Increased levels of optimism about business prospects with 72% of respondents claiming to be fairly or very optimistic - the highest level of optimism since the inaugural Gresham Monitor in July 2000.
There has been a significant upswing in the levels of confidence among manufacturing companies. Sixty eight per cent of manufacturers are now optimistic about business prospects, compared to only 36% in January 2003.
The highest number of companies reporting an increase in profits, 57%, since July 2000.
The number of companies reporting a rise in turnover over the last 12 months, 58%, is the highest since July 2001, with companies in the North and the Midlands performing best.
The growth in turnover and profits is reflected in companies attitudes to staffing with 45% of respondents expecting to take on extra staff this year, and just 15% anticipating redundancies.
Companies see increased competition as the biggest threat in the next year with 72% of firms highlighting the issue, 58% stated that rising costs would also constitute a threat to their business. Only 21% of businesses were concerned about rising interest rates.

Mike Henebery, director of Gresham's London investment team, said:
"The economic uncertainty that mid-market companies have been operating under for the past two years appears to have finally lifted. It is clear that companies have adapted to the tough economic conditions by becoming leaner and fitter and are now in a position to respond even more aggressively to opportunities in the future".

"What is compelling about the current levels of optimism is that they are based on very real improvements in financial performance giving those companies a strong platform from which to drive growth".

"For Gresham this is an exciting time - we have raised £235m in our Gresham III fund and are looking for outstanding management teams in which to invest. We are confident that our regional network coupled with our proprietary deal origination function will ensure that Gresham is in the best position to source deals and realise growth for management teams, and indeed our own investors."