More than half of businesses in the South East agree 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. The research shows that 59% of businesses agree with the Chancellor, compared to 38% who disagree*.
James Stares, Chairman of the Southern Committee of R3 and partner at Grant Thornton in Southampton, says: “There has been plenty of positive economic news recently, but it’s important that we don’t forget that a lot of businesses, small businesses in particular, still feel they have significant hurdles to overcome. Now isn’t the time for complacency.
“Larger businesses may well be confident that they can ride out any remaining bumps on the road to recovery, but small businesses still face significant pressures, whether it’s access to finance or simply the pressures of growing demand.”
“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.”
James says that South East businesses’ rosy outlooks could be attributed to the fact they are doing well; R3’s latest Business Distress Index finds the South East’s business community in increasingly robust shape.
A whopping 71% of businesses report no key sign of business distress – decreased profits, decreased sales volumes, regularly using the maximum overdraft, falling market share, redundancies.
At the same time, 60% of businesses are reporting at least one sign of growth – investing in new equipment, business expansion, increased sales, increased market share, increased profits – up from 48% in March.
James Stares says: “The falling levels of business distress are very encouraging, although we still have to play the waiting game on the growth indicators. If economic growth is to be sustained, we will need to see improvement in the growth indicators in the coming months.”
