Small Businesses optimistic about future trading
Business confidence has risen for the first time in 13 months, suggesting that firms are adapting to the realities of the recession, according to a new report.
The survey of 11,000 firms, by accountancy firm BDO Stoy Hayward, showed a climb in short- and medium-term business confidence between January and February 2009, with increased output and optimism.
The research also indicated that firms were taking steps to tackle the economic challenges of the downturn, from halting production to introducing new employment strategies to keep costs down.
However, the report painted a bleak picture of the labour market, predicting that a further 320,000 jobs could be cut over the next quarter.
BDO Stoy Hayward partner, Peter Hayward, said the rise in optimism was encouraging, but that it was still too early to say whether business confidence had hit rock bottom.
“Businesses expect the economy to continue to contract, but are now adapting their business models for an uncertain future,” he said. “We’ve already seen a number of false dawns, but this month’s modest increases are encouraging. We must watch carefully to see if this is the start of an upward trend.”
The British Chambers of Commerce (BCC) said it was premature to say whether firms were genuinely starting to feel more positive about future trading.
“From initial reports, businesses still appear to be having very real cashflow problems and many do not intend to invest heavily over the next three months, indicating that confidence remains low,” said a BCC spokesman.