FTSE stocks that can benefit as UK business confidence hits record high

Highlights

• With the returning of the furloughed staff to work, the business confidence in the UK is following an upward trend.
• The overall business confidence in the UK fell slightly from 46% in September to 43% in October.
• With strong trading prospects, manufacturing sector is the most optimistic, with 70% of the manufacturing firms planning to bring back the furloughed workers.

With the returning of the furloughed staff to work, the business confidence in the UK is following an upward trend. Touching the second highest level since March 2020 last month, the business confidence is increasing even though the energy costs are rising, and supply chains are disrupted.

According to a survey of 1,200 firms conducted by Lloyds Bank Business Barometer between 1 October and 15 October, the overall business confidence in the UK fell slightly from 46% in September to 43% in October but was still greater than the long-term average of 28%.

The business sentiment remained strong, and confidence improved or remained stable in six out of 12 surveyed regions. Highest level of confidence was observed in London, reaching 65% as employment expectations rise, which was followed by the Northeast touching 61%. Confidence also increased in other regions, which include the East Midlands (55%), West Midlands (50%), the South-West (48%), and the East of England (33%). However, it also decreased in some regions but was still close to the national average. These include North-West, Yorkshire, and the Humber.

Around 60% of the British firms are planning to bring back more than half of their furloughed workers, and around 48% of the firms said that the end of the Coronavirus job retention scheme has made it easier for them to recruit the right people for jobs. Around 37% of the business are expected to raise the staffing level in the next one year, along with an expected increase of 2%-3% in the average wage growth. The costs will be passed on to the customers as businesses are expected to increase their prices.

With strong trading prospects, manufacturing sector is the most optimistic. Despite having higher difficulties in finding the appropriately skilled people, around 70% of the manufacturing firms are expected to bring back the furloughed workers, which is higher than all other sectors.

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Let’s take a look at some of the UK industrial stocks which may benefit with the return of furloughed staff to work.

Renewi plc (LON: RWI)

European waste management company Renewi plc is listed on the London Stock Exchange and Euronext Amsterdam. Its current market cap stands at £567.37 million, and it has given a return of 233.65% in 1 year. Renewi plc’s shares were trading at GBX 709.00 as of 29 October 2021.

Water Intelligence Plc (LON:WATR)

Covering residential, commercial, and municipal customers Water Intelligence plc offers precision leak detection and remediation solutions. Its market cap stands at £191.40 million, and it has given a return of 130.39% in 1 year. Water Intelligence plc’s shares were trading at GBX 1,175.00 as of 29 October 2021.

Equals Group Plc (LON: EQLS)

Equals Group Plc provides money management solutions to both business and retail customers. Its market cap stands at £122.85 million, and it has given a return of 197.83% in 1 year. Equals Group plc’s shares were trading at GBX 68.50 as of 29 October 2021.

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RBG Holdings plc (LON: RGBP)

UK-based professional services group RBG Holdings plc provides a range of legal services and includes Rosenblatt Limited, which is among the leading law firms in the UK. Its market cap stands at £125.36 million, and it has given a return of 110.74% in 1 year. RBG Holdings plc’s shares were trading at GBX 131.50 as of 29 October 2021.

Impellam Group plc (LON:IPEL)

AIM-listed Impellam Group plc is among the leading recruitment & managed services providers in the UK. Its market cap stands at £228.96 million, and it has given a return of 124.44% in 1 year. Impellam Group plc’s shares were trading at GBX 505.00 as of 29 October 2021.