Daring to hope
Mobile phone operator O2 has published the latest findings of its Small Business Confidence Index and, while it reveals that over half (59 percent) of small businesses are predicting better business performance next year, there are still many concerns.
The good news that the majority of small businesses are optimistic has to be tempered by the context in which they're commenting. 2009 witnessed the worst recession since the Great Depression, so you would hope that people are expecting next year to be better. Having said that, the Great Depression lasted around ten years.
The picture is less rosy concerning the current state of business, with only 27 percent saying their businesses are healthier now than they were this time last year, and only 32 percent saying they feel more confident than a year ago. However the recovery, assuming that's what we're experiencing, is still in its infancy.
It seems that general belt-tightening has been the key to survival through 2009, with 39 percent of business having cut staff (compared to only one percent six months ago). One result of this, however, is that 35 percent of businesses expect increased profits in the next three months.
The biggest reasons for pessimism centre around the UK economy's reluctance to emerge from recession and the consequent low levels of consumer confidence. 14 percent of the survey expected a ‘double dip' recession, with another slump coming towards the end of next year. The top specific concerns were the VAT increase, bank lending practices and increases in interest rates.
