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Economy not out of danger yet, small businesses say

Posted at September 11, 2013 | Categories : News

Almost half of UK businesses disagree with the Chancellor’s statement that the economy has moved “from rescue to recovery”, according to the latest Business Distress Index from R3, the insolvency trade body.

Opposition to the Chancellor’s assessment was strongest amongst small businesses, of which 51% did not believe the economy had moved into the recovery phase.

On the other hand, 55% of large businesses agreed that it had with only 35% disagreeing.

Commenting on the figures, R3 president, Liz Bingham, says: “It is easily forgotten that one of the most dangerous times for a business is immediately after a recession, when a lack of investment as a result of recessionary cutbacks and the stress of servicing growing demand take their toll.

“While it might look like economic recovery is taking place, it may not feel that way for businesses on the frontline just yet.”

However, R3’s latest Business Distress Index also shows the UK’s business community in increasingly robust shape.

Only 35% of firms surveyed reported at least one key sign of business distress (decreased profits, decreased sales volumes, regularly using the  maximum overdraft, falling market share, redundancies) down from 40% in March 2013, and down from 53% in June 2012.