Rural economic growth remains fragile

The survey found that while business confidence is increasing, with more than four-fifths (85%) reporting the same or higher sales in all sectors, lower levels of investment in a fragile rural economy remain a worrying factor for more than a quarter of both business types.

Rural businesses, such as property and tourism enterprises, reported higher confidence with almost one third feeling more optimistic than last year and 15% expecting to increase employment.

Agricultural businesses surveyed said that employment will remain stable, with four-fifths looking to maintain job numbers at the current level. Some 41% reported stable profits, with a third anticipating higher profit margins.

CLA President Harry Cotterell said: "Rural areas were last to enter the recession and there are no significant signs of recovery yet. However, confidence is returning but it is slow and happening in a very fragile trading environment.

"A lack of investment over the next 12 months could have a detrimental impact on business growth and the potential to diversify. The results from the Index highlight the need for the Government to implement its growth strategy as soon as possible."

Jason Beedell, Head of Research at Smiths Gore, said: "The Index shows that a significant proportion of rural businesses are still experiencing challenging trading conditions with only about a third of businesses expecting a better 2012 than 2011.

"Local and national government can take action to make doing business easier – such as the recent pro-development National Planning Policy Framework and reducing red tape. But we would like to see more action, especially from local government."

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