Business optimism across Kent and Medway is improving, according to the latest economic report.

The first quarterly report of 2024 - published by the Kent Invicta Chamber of Commerce and the British Chambers of Commerce - reveals that while inflationary pressures and recruitment difficulties continue to be a challenge, there are “reasons for optimism”.

The report is the result of a survey of business owners with local chambers feeding back local responses to create a national picture.

Encouragingly, despite the ongoing concerns, business confidence is now at its highest since the fourth quarter (Q4) of 2021 - a period just before inflation rates rocketed.

According to the report, the net balance of businesses’ profitability expectations in the next year increased from 14% to 28% - driven primarily by the service sector. The net profitability expectations for businesses in the service sector were at 31% compared to the manufacturing sector at 15%.

In another encouraging sign, turnover expectations for Kent’s businesses reported a balance of 46%, an increase from 32% last quarter.

Local findings in the report also revealed 67% of those quizzed looked to recruit in Q1 - while 62% reported an increase in their employment costs.

Additionally, 55% of the county’s businesses reported that inflation is more of a concern to business than three months ago.

Tudor Price, chief executive of the Kent Invicta chamber said: “While inflationary pressures and recruitment difficulties persist, Kent and Medway businesses see reasons for optimism.

“Trade is improving, with both domestic and export demand showing positive momentum. Notably, domestic orders are positive for the first time since Q2 2022.

“The mix of inflationary pressure is changing with competition pressure increasing and monetary pressures still a major factor but reducing.

“One concern is the mixed picture within manufacturing, which is experiencing challenges in both domestic and export sales.

Businesses still face significant challenges filling open positions

“Employment expectations are recovering after a recent dip, and recruitment remains strong. However, businesses still face significant challenges filling open positions.”

The inflation rate for March was 3.2% - continuing a downward trend since hitting a high of 11.1% in October 2022.

Meanwhile, the number of unemployed has risen in every district of Kent and Medway, the latest figures from the Office for National Statistics (ONS) reveal.

Across the entire county, the confirmed figures for February show 40,320 were out of work - an increase of 1,155 on the previous month.

The jobless total equates to 3.6% of the adult population of Kent and Medway. Nationally, the rate for the three months up to the end of February was 4.2%.