Business Outlook Survey - Company Leaders See Opportunity in a Different Economy

Seven in ten respondents to Smith & Williamson's second survey of its regional business contacts are confident in their business' prospects for the year ahead, despite a third believing the economy will decline again.

General Overview

This is Smith & Williamson's second survey of its regional business contacts. Overall we found that our contacts are more confident about their own businesses and their own regions than they are about the overall UK economy. In fact a third of respondents agree that the economy will decline again, while 46% are uncertain and only one in ten respondents disagreed.

Respondents were asked to select the issues most important to their business and consumer confidence received votes from 55% of respondents. Availability of debt received votes from 20% and interest rates received votes from 17% of respondents.

Just over a third (36%) of respondents are either considering or planning to raise finance in the next year. Of those businesses, 75% are considering bank lending. Almost six in ten (58%) of the respondents agreed or strongly agreed that their bank understands their business needs. These two questions show that businesses and banks are finding a successful path forward, despite the tough economic climate.

Regional Breakdown

Bournemouth

• Consumer confidence is the most important factor to businesses in and around Bournemouth and Poole. 45% of the people questioned, singled it out from a list of business issues, with interest rates coming second.
• 85% of respondents have revised their business strategy to reflect the current economic challenges, which is prudent policy.
• Nearly three-quarters of respondents are positive or very positive about the local outlook over the next 12 months, but less so nationally, with only 10% of respondents reporting a positive outlook for the year ahead.
• 40% of local businesses are also planning to, or considering, raising finance within the next year through bank lending (more than half) and personal borrowing (just under half).

Bristol

• Half of respondents in Bristol report that they are considering or planning to raise finance in the next 12 months. Of those respondents, 62% are considering bank lending, 23% are considering private equity or share subscriptions. The results show a higher percentage of businesses are thinking of raising finance this year in Bristol than the other surveyed areas.
• 67% of respondents are positive or very positive about the outlook for their own business.
• 23% reported positive sentiment regarding the outlook for their region. Only 13% of respondents are positive about the outlook for the UK.
• Consumer confidence and public spending are the most important factors for businesses in Bristol, with 43% of respondents selecting these from a list of issues faced by businesses.
• 31% agree or agree strongly that the economy will decline again. Only 15% disagree with that sentiment.

Guildford

• Six in ten respondents are positive or very positive about the outlook for their business for the next 12 months, and no respondents had a negative outlook.
• Responses are more measured for the region's economy with 47% giving positive responses and 53% giving neutral responses. This is an improvement from 2009, when only a third were positive about the outlook for the region and one in five reported a negative outlook.
• More than half (53%) of respondents agree or agree strongly that the recovery is temporary. Only one in ten disagree with that statement.
• 60% of the respondents chose consumer confidence as the most important issue facing their business. The availability of debt was selected by a third of the respondents.

Portsmouth

• Consumer confidence is the most important factor to businesses in Portsmouth. Nearly half of the people questioned singled this out from a list of business issues, with 25% selecting interest rates.
• Nearly nine out of ten respondents in Portsmouth are positive or very positive about the outlook for their business over the next 12 months.
• There is also a high level of optimism at the regional level. Local businesses are still reducing head count, but four in ten are also reporting stable headcounts and one in five are recruiting again.
• Six in ten businesses are planning to raise finance in the next 12 months, with 88% of those businesses selecting bank lending as a potential method of raising funds.

Salisbury

• Almost six in ten businesses in Salisbury have a positive or very positive outlook for their business over the next 12 months.
• A quarter are positive about their region's economy, down from 2009 when almost half were positive. However, only 5% are negative compared to one in ten last year, with the majority (70%) shifting to a neutral outlook.
• Almost six in ten (57%) think the recovery is temporary and a third are not sure. Only 14% think the economy will not decline again.
• Consumer confidence is the most important issue for businesses in Salisbury with 70% of respondents selecting it as a key issue.
• One in five businesses in Salisbury are planning to raise finance in 2010. Bank lending is the most popular method or considering raising finance, with 100% of those who answered the question selecting it as an option.

Southampton

• Consumer confidence is the most important factor to businesses in Southampton. More than half of the people questioned singled it out from a list of business issues.
• Opinion is split regarding the strength of the economy – a quarter think the recovery is temporary and a quarter think the economy will not decline again.
• More than seven in ten respondents are positive or very positive about the outlook for their business over the next 12 months.
• Headcounts seem to be stabilising, with a doubling of firms hiring staff compared to last year. Meanwhile, insolvency levels appear to be on the ebb, with nearly six out of ten reporting increased levels of insolvency in the businesses they deal with compared to nearly seven out of ten in 2009.
• One in five respondents are planning to, or considering raising finance in the next 12 months, of which 83% of those are considering bank lending.
  
  

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