A survey conducted by Lloyds TSB among smaller businesses in North West England suggests that confidence for the coming year could be on the rise. The banking group spoke to 110 companies in the region, and found that many of them believe that then situation in Europe and at home will improve.
42% of the businesses Lloyds spoke to said that they believe that orders over the first six months of 2013 will go up, while just 13% believe the opposite may be the most likely outcome. 44% of businesses who were surveyed that they feel sales will increase over that period; 16% think sales will fall.
Regional director for Lloyds TSB commercial in the north and Midlands, Leigh Taylor recently said: “Businesses are clearly feeling more optimistic about Europe and, after a poor 2012, we should see more demand and orders coming through from the continent over the coming months. However, many firms are still cautious and are not investing in increasing their headcount or on key capital projects.”
In terms of investment, which is likely to help drive any economic growth over the coming months, 21% of the 110 firms say they will increase the amount they spend, compared with 16% who want to spend less than they currently do. 44% of firms in the North West will maintain current levels of spending.
Recruitment is something that may not be on the agenda for small businesses. Only 22% said they would create any new vacancies this year, compared to two out of three saying they have no plans to add to their existing workforces.
Despite the improving mood of businesses in the region, the fact remains that times are still tough. Access to finance from banks, low consumer confidence and the rising cost of energy are all issues they have to contend with. The need to cut costs is one that remains great, especially in this climate.
According to energy saving experts Make It Cheaper “Small businesses may find that access to loans from banks may get a little easier, but when they open their energy bills, they may get a shock. Comparing business gas & electricity suppliers within minutes online, they could help to save themselves a little money, which may leave them more funds for recruitment or investment in other areas.” The cost of gas and electricity is one problem that many smaller firms are struggling to find a solution to. They suggest that saving money on energy costs is something that can be done despite the current trend for prices rising considerably in recent years.
Optimism about the European economy and possible growth for demand could fuel growth for small businesses. However, 41% of firms who spoke to Lloyds TSB fear that weaker demand in the UK could prove disastrous for them.
Photo credit: Bryan Eldridge