Although south west firms feel trading conditions are worse than in 2008, 39% are hopeful for the future according to a new business index.
The Business Factors Index has been compiled by independent invoice financier Bibby Financial Services and is unique within the alternative finance sector.
The first in a series of quarterly reports which aim to reveal key findings about the south west economy and small businesses – on this occasion the data highlights that a ‘V’-shaped recovery is unlikely but trading conditions should ultimately improve over the coming year.
The Bibby Business Factors Index tracks small business turnover over the past two years. The trends derived from this data have been collated with the results of a series of interviews conducted among south west business owners across a range of sectors. The south west study revealed:
• Nearly a third (32%) say that an increase in the availability of credit could have helped the recovery come sooner
• 38% of business owners do not anticipate a recovery for at least a year
• One in 10 (10% ) believe business will be adversely affected by the recession for three years or more
• More than half (54%) of owners and managers report that business is worse than this time last year
• 84% think business in the south west will pick up in line with the rest of the UK
More encouragingly, however:
• Almost four in ten (39%) are hopeful for the future
• 13% expect the recovery may come by summer 2010
• 15% report their current trading conditions as ‘steady’
Findings from the index are supported by latest GDP figures which show a decrease by 0.4% in the third quarter of 2009 as the pace of recovery remained constrained by a lack of consumer spending and a decline in government expenditure.
Indeed, the Bank of England’s own policymakers have warned against too much further quantitative easing, for fear of the balance tipping the other way, therefore, the picture is not yet a favourable one for British businesses.