Confidence in the economy among SMEs has suffered recently, according to a new survey.
The study, which was carried out by BDRC Continental, the UK’s largest market research agency, found that many SMEs are concerned the economy may slip back into recession.
Having questioned some 450 businesses throughout the country, the poll revealed that SMEs optimism fell significantly from a net balance of +4 per cent in July to -12 per cent in August.
The drop marks the lowest economic confidence levels since March 2009, and comes after six months of relatively stable net optimism ratings.
The ebbing of faith was most noticeable among smaller firms. Those with less than 10 employees were the most pessimistic, with a net score of -16 per cent. Those with 11-50 employees saw the biggest change in August, down 21 points, but still managed to remain positive overall (+5 per cent). The optimism of bigger businesses, with 50-250 employees, was stable month-on-month (at zero).
When it comes to the prospects of individual businesses, there was a similar, if not quite so dramatic, decline in confidence.
The balance of +31 per cent registered in July slid to just +21 per cent in August.
Among manufacturers, there was a positive balance of 14 per cent as to their likely business performance in the coming months, down from the +37 per cent in July.
This fall both mirrors their declining confidence in the economy generally (down 51 points to -27 per cent) and is also in line with results from a recently published SME trends survey from the CBI which reported growing pessimism amongst manufacturers.
Trading prospects for the services industry held relatively high at +32 per cent, dropping just 6 per cent on the month.
Shiona Davies, director of business to business research at BDRC, said that August had been a challenging month for the global economy with the downgrading of US credit ratings, considerable concerns within the Euro, and, closer to home, rioting in Britain, all of which will have had an adverse effect on SME sentiment.
She continued: “[The results] have reflected the growing concern amongst SMEs and are a strong indication that businesses fear a double-dip recession. This is now starting to impact on optimism amongst SMEs for their own business, albeit SMEs remain more confident about their own prospects than those of the economy more generally.”
