Rural economy on brink of further recession
Rising unemployment, shrinking profits and plummeting confidence have pushed the rural economy to the brink of a further recession, a survey shows.
Data from the Rural Economy Index collated by the Country Land and Business Association and land agents Smiths Gore show both agricultural and non-agricultural rural businesses have been suffering during the first quarter of 2013.
But it reveals that agricultural businesses are faring worst.
The optimism felt in 2012 has gone, due to bad weather, poor harvests and the rising price of livestock feed, the report states.
All eight survey indicators used in the survey fell across both types of business. The index’s measure of optimism fell by 40% compared with the same quarter last year.
Sales have fallen in the past six months with orders, sales and profits expected to be lower in the next 12 months. Farming businesses also anticipate employing fewer people, the results show.
Non-farming businesses show sales have dropped and that these, too, intend to employ fewer people in the next 12 months.
CLA president Harry Cotterell called on the government to speed up the process of cutting burdensome regulations in line with the recommendations made by Richard MacDonald’s red tape task force in 2012.
Mr Cotterell said: “This [data] comes at a time when the government’s priority is growth. Therefore, we call on the government to reduce the negative impacts of over-regulation by implementing the Macdonald recommendations as soon as possible.
“It must also put in place a broadband infrastructure that is effective, affordable and available to all.”
Jason Beedell, head of research at Smiths Gore, said that the index clearly showed the rural economy continued to suffer because of the bad weather which he said was expected.
“More shocking is the fall in expected profitability for non-agricultural businesses over the next 12 months. The rural economy has stalled and further recession is possible,” Dr Beedell said.
Figures show 2012 was ‘toughest year’ for dairy
