FPB Government’s support in spotlight
Following the demise of regional Business Links, and amid concerns new Local Enterprise Partnerships are more strategic bodies than business service providers, the Forum of Private Business (Forum) has surveyed its members about changes to the business support landscape.
The present support being offered by the new ‘streamlined’ and centralised Business Link was deemed inadequate to aid growth by 61% of members surveyed. Just 10% of members feel that the new support structure will provide them with cost-effective support - and more than twice as many (21%) believe it will not. Furthermore, 30% of members consider support from Business Link to be irrelevant to their business, 40% said they had not required its support to date and 22% believe the public sector should not be involved in the type of business support of the type provided by Business Link at all.
In all, 21% of respondents said they had, at some point in the past, used their local Business Link’s face-to-face service,
Trends in lending Worrying figures
Lending to small and medium-sized firms continued to contract in the second half of 2011, according to the Bank of England’s latest Trends in Lending survey. New data revealed that the stock of lending to SMEs contracted between the end of April 2011 and the end of November 2011. While lending to all UK businesses was shown to have increased by around £0.4 billion in the three months to November, it was noted that the annual rate of growth was negative over the
CBI Manufacturing sentiment hit
The latest CBI quarterly Industrial Trends Survey has found that sentiment among UK manufacturers deteriorated in the past three months, as confidence was hit by stagnant output, falling demand and concerns over exports.
Of the 387 manufacturers responding to the survey, 27% said output rose, while 26% said that it fell. The resulting rounded balance of +2% showed that production weakened sharply in the three months to January. Manufacturers expect output to rise modestly in the next three months, with a balance of +15%. Domestic and export orders both fell for the first time in two years. The fall in domestic orders (a
balance of -17%) was the first since January 2010, and the decline in export orders (-19%) was the first since October 2009.
In a separate survey the CBI has predicted that growth will restart in 2012, but high levels of uncertainty around the economic outlook, mainly driven by the situation in the euro area, mean growth will remain subdued, particularly in the first half of this year. The CBI expects 0.9% GDP growth in 2012, a little down from November’s forecast (1.2%), mainly reflecting the impact from the GDP contraction in the fourth quarter of last year. Modest growth of 2.0% is predicted in 2013.
same period. Commenting on the worrying lack of confidence revealed in the latest report, David Birne, a business recovery specialist at the chartered accountants HW Fisher & Company, said: “Things have got so bad that some struggling bosses now don’t even bother asking the banks for help. Buried in today’s data is a breathtaking figure - demand for small business bank loans plummeted by more than 35% in the last quarter of 2011.”
which has now been replaced by a central website and call centre. While 58% said they had not used the local Business Links for a long time many remain concerned that the loss of these services could erode specific understanding of their businesses and reduce the effectiveness of advice provided.
In all, 61% of members identified a business support need for workplace training, followed by 53% who cited grants for research and development, 51% business growth, 50% SME leadership and management programmes, 47% support for innovation, 47% accessing finance, 45% rural development and 42% resource efficiency.
FSB Falling confidence
Small business confidence plummeted in 2011 as businesses were hit by high inflation, rising utilities bills and reduced consumer spending power, according to the latest findings from the Federation of Small Businesses (FSB) ‘Voice of Small Business’ Index.
The Index, comprising some 1,600 responses from businesses across the UK, recorded a score of -24.5 - the lowest level since the Index started in 2010 and is a fall of some 15.2 points over the quarter. And, with one in eight (12.6%) firms expecting a worsening economic situation in the coming three months, the FSB is calling on the Government to act on policies and initiatives already announced to help boost small business confidence so that they can invest and grow.
John Walker, National Chairman, Federation of Small Businesses, said: “Small firms have heard what the Government has to say but are still waiting to see implementation. We believe that must be the Government’s priority: to make 2012 the year of doing, with the aim of creating a dynamic business landscape in which our entrepreneurs can grow and flourish.”
Exporting Growth slows
The third DHL/BCC Trade Confidence Index, has revealed that growth among UK exporters slowed during the last quarter of 2011. The index, which draws upon a survey of over a thousand exporters and an analysis of export documentation, shows a muted outlook for domestic and international trade activity in 2012.
Despite worsening confidence about the general business situation amid concerns over the slowdown in the world economy, the balance of UK manufacturing firms reporting an increase in their domestic orders saw a marginal swing from -2% in the third quarter to +2% in the fourth. Overall the survey results show, however, that firms recorded weaker export orders than export sales, suggesting a slowing of export growth towards the end of the year. Phil Couchman, CEO of DHL Express UK and Ireland, said: “With the latest figures in the report showing a weakening in export orders and indeed overall business confidence, the reluctance from exporters to invest is a concern. However, factors such as a flat base rate and Government making the UK a leading offshore trading centre for the Renminbi could give UK businesses a competitive advantage.”
March 2012 Business Moneyfacts ® 7
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