Optimism among professionals in the third quarter hit its highest level since the start of the financial crisis two years ago, the Institute of Chartered Accountants in England and Wales (ICAEW) said.

The confidence measure jumped to 4.8 at the end of June from -28.2 in March – the biggest improvement since the survey began in 2003. The institute predicts that the economy will grow by 0.5% this quarter, breaking five quarters of falling output.

ICAEW chief executive Michael Izza said the findings suggest that “the UK recession is at an end”.

He added: “While there is no doubt that the UK economy is on its way to recovery, we shouldn’t underestimate the challenges ahead for businesses.”

Toyota production line in Derbyshire

The pound has been rising again against the US dollar following better-than-expected economic news.

The Office for National Statistics said industrial production unexpectedly rose 0.5% in June from May, although it is still down 11.1% from last year.

See pound vs dollar

Also, a survey from the Chartered Institute for Purchasing and Supply (CIPS) showed the service sector growing at its fastest for 18 months.

The pound rose back above $1.70 to its highest level since October 2008.

The rise in industrial production was the biggest since October 2007 and was helped by a surge in car production.

The CIPS purchasing managers’ survey gave a reading for the services sector of 53.2 for July, up from 51.6 in June.

Any figure above 50 indicates an expansion in the sector.

It was the highest reading since February 2008.

“It is very much consistent with the green shoots recovery story,” said Mark Miller, an economist at HBOS.

“It continues the theme that the forward-looking business surveys are showing some more encouraging signs.”

“We are told there are grants available, but when you apply for them, there are just so many hoops you have to jump through, you’d swear they really didn’t want to give you the money” said Tony Lees, owner of Dentanurse, while being interviewed by the BBC.

SMEs (Small and Medium Enterprises with less than 249 people) employ 13.5 million people in the UK, 59% of the private sector workforce. According to the Federation of Small Businesses, these companies account for 51% of UK GDP.

You can read the whole BBC article here

Sales in UK shops shot up 1.2% in June following a sharp fall in May as hot summer weather boosted clothing purchases, official figures show.

The jump was much more than the 0.3% rise expected by economists. Retail sales had fallen 0.9% in May.

The Office for National Statistics said that sales rose 2.9% from June 2008.

Shops have also brought forward their summer sales, which along with the effects of last month’s heatwave, enticed consumers to spend.

The much better-than-expected figures lend support to the view that the UK is now over the worst of the recession.

Economic growth figures due on Friday are expected to show that the economy shrank around 0.4% between April and June, compared with 2.4% in the first three months of the year.

The survey, conducted for The Institute by Ipsos MORI, reveals that the number of marketers who believe the UK economy will worsen in the next 12 months has halved to 34 per cent (down from 70 per cent in the Autumn 2008 survey). Likewise, those believing the UK economy will improve in the next 12 months has risen sharply to 26 per cent (up from 11 per cent in the Autumn 2008 survey).

When questioned about the prospects for their own organisation in the year ahead, more marketers believe business will improve (35 per cent) than believe it will get worse (24 per cent) – reversing the decline in confidence seen in the previous four surveys.

As belts tighten, marketing spend is increasingly being focused on the activities that marketers believe deliver the best return on investment – Customer Relationship Management, Public Relations and email marketing. In contrast, marketing spend on advertising (excluding online) is down 4.9 per cent, reflecting the fact that 23 per cent of those surveyed believed it delivers the worst return on investment.

Commenting on the findings, David Thorp, Director of Research and Professional Development at The Chartered Institute of Marketing said,

“Despite fears over the economy and job prospects for the rest of 2009, it is clear that we are turning a corner in marketers’ confidence about the future. For now, marketers are wisely concentrating their spend in the most effective activities, and as we move into 2010, I’m convinced this more professional approach will stand them in good stead when the economy recovers.”

Source: Think London, Marketing Week

Yet more positive news courtesy of Nationwide. Slowly but surely people seem to be poking their heads up from the parapet without fear of being shot down by bankruptcy or financial ruin. Well done us, that’s the spirit!

CONSUMER CONFIDENCE INCREASES

• Consumer Confidence rose by four points
to 58 in June.
• The Expectations Index increased by
eight points to 86.
• The Spending Index increased by one
point to 104.
• The Present Situation Index fell from 18
in May to 17 in June.

EXPECTATIONS FOR FUTURE ARE RISING…

• A third of people now believe that the
economic situation will be better than
today in six months time, with less than
a quarter (23%) thinking it will be worse.

Source: BBC

Although it’s not boom time, and (of course) some concerns remain, there are some decidedly cheery signs: Consumer Confidence rose by 8 points – the largest single monthly rise for two years – whilst the Spending Index continued its slow climb.

Commenting on these figures Nationwide’s Senior Economist, Martin Gahabauer observed “a strong rebound in global equity markets”, “signs of improvement in housing market indicators” and “a number of the world’s largest banks [announcing] a return to profits…[which] may signal the start of a thaw in the money markets”.

He also remarked that some 26% of those questioned “now believe that the economic situation will be better in six months time – a figure not seen since the bank bail-out scheme was announced in October last year”.

Things could indeed be looking up.

We hate and we love

It’s not often that greenshootsblog.com is in two minds about things. Usually we’re single-minded in our appreciation of positive business stories, that will encourage us to keep going as we try to get through these undoubtedly tough times. And it’s even less often that we’d take on such august publications as the Economist, but in this instance we find ourselves unable to stay silent.

First, where we see eye-to-eye. In one of its leaders last week, A glimmer of hope, we were delighted to see the quote that we’ve been pleased to borrow for the header of this post. Also that “two thirds of the 42 stockmarkets” that they track are “up” that week, reports of China’s economy picking up, the slump in global manufacturing easing as well as property markets in the US and UK “showing signs of life”. Exactly the sort of news we love to share.

Then where we part company. When discussing the ongoing dangers that remain, the newspaper questioned how to cope and suggested that it was “certainly not by clutching at scraps of good news” that greenshootsblog.com started to take umbridge. The (simplified) gist of their argument was that this would prevent, rather than encourage the world to take action.

Perhaps the fine newspaper should spend a little more time talking to people actually dealing with the issues, rather than dealing with people who are just talking about them. From where we stand, this sort of good news is what encourages those of us trying to make things better to try a little harder – and that perhaps, just perhaps it might be working.

So for that reason we will both agree and disagree with The Economist this time.