Despite the prospect of a triple-dip recession, the downgrading of the UK’s credit rating and the extension of austerity measures, UK’s small and medium-sized companies are cautiously optimistic about prospects over the next few months, according to the Business Barometer Report, a regular report by leading serviced office provider Business Environment.
The report, based on a survey of 300 senior business people found that a majority of firms (70 per cent) expected their sector to grow in the coming quarter; a majority (58 per cent) were either “confident” or “very confident” in the UK economy’s prospects over the first three months of 2013. Nearly a third (32.7 per cent) said they expected their business to expand.
This comes after a final quarter of 2012 in which businesses reported overwhelming stability. When asked what their turnover was compared to the preceding quarter, more than half of respondents (61.7 per cent) reported that it remained the same. Similarly, when asked whether the number of employees in their firm had changed over the past quarter, the most frequent reply was that headcounts had remained constant (47.7 choosing this option).
David Saul, managing director of Business Environment, said: “One of the main messages to come from the report was that while few companies are thriving, a large amount are on an even keel. Nearly half a decade after the beginning of the financial crisis, the initial fallout is now over and businesses are beginning to adjust to a long period of austerity and reduced consumer demand.
“We see this reflected in much of the survey’s findings. Companies are not growing at a fast rate, but they remain confident about the long-term prospects for their firms. Companies complain about bank lending, but few expect the economy to tank in 2013.
“The issue for businesses is whether to become reconciled to a period of stagnation, or whether to try to think their way out of it – by innovating, expanding into new markets, or exporting to new territories.”
One striking finding was that the smaller the firm, the more positive they were about their business’ future. 68.2% of firms between 1 and 9 employees were either “positive” or “very positive” about the longevity of their firm, compared to 66.3% of firms with between 10 and 49 employees, 64.8% of firms between 50 and 99 employees, and 58.9 per cent of firms between 100 and 249 employees. For firms with more than 250 employees, the figure was just 54.5%.