| | Optimism amongst UK
businesses is at its
highest level since 2004,
says a KPMG survey: while
over half of respondents
feel the economy is on an
upward curve,
three-quarters believe
that UK businesses are
competitive within
Europe. This is in direct
contrast with the
previous survey, which
reported a diminution in
confidence.
KPMG's latest survey
of UK small to
medium-sized businesses
(classed as having
turnover of between £5m
and £500m) shows a
substantial hike in the
number of businesses who
are optimistic about
their sector's prospects
over the coming 12
months.
When asked how they
felt about the prospects
for small to medium-sized
companies over the next
year, almost two in three
(64%) of those surveyed
predicted a positive | |
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| | "competitive" or
"extremely competitive"
within Europe.
Mel Egglenton, UK head
of middle market for
KPMG, said: "Our latest
survey shows confidence
amongst SMEs is clearly
on the up, with levels of
optimism as high as they
have been for three or
four years. It is also
worth highlighting that
the people who answer
these questions are
businessmen, not
economists. Therefore,
the rationale for their
answer is based not on
some detailed analysis of
macro-economic trends but
the health of their order
book. So, to see these
businesses in confident
mood and with healthy
order books surely bodes
well for the future."
So what has prompted
this upturn in
confidence? Egglenton
said: "Well it's hard to
put a finger on it, but
it wasn't that long ago
that small to | |
|
| | medium-sized businesses
were struggling with
rising energy costs. Many
had to look hard at ways
to improve their
efficiency, and perhaps
as a result they are now
left with businesses that
are more robust than they
would have been
otherwise. So it appears
that those who felt the
pinch over the last year
or two have now steadied
the ship and are looking
forward to the next 12
months with a renewed
sense of optimism."
Part of the reason for
the upswing in confidence
may be found elsewhere in
the survey. In the past,
when asked where they
feel the UK currently
stands in the economic
cycle, responses have
tended to be fairly well
spread out. This quarter,
however, there is a
definite groundswell of
opinion in one direction,
with 58% believing that
the economy is on an
upward curve.
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One part of the survey
that did highlight a
growing concern among
many businesses was the
questions on interest
rates. When asked what
should happen to interest
rates, 66% felt they
should be held at present
levels. Egglenton
commented: "Much has been
written in recent months
about what the Bank of
England should do to the
UK's interest rate, and
our findings show that
two-thirds of businesses
would like to see
interest rates held at
their present levels.
However, there is an
obvious concern among
those questioned that
interest rates are going
to continue to increase;
41% see this as being a
major issue in the
future. It'll be
interesting to watch what
effect any increase will
have on the levels of
confidence seen in this
report."
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