Business confidence starts to return to the UK

02/07/2010

• Half of UK businesses confident of growth in the next 12 months
• One in 25 small businesses still fearful of going out of business

Business confidence is starting to return to the UK as an increasing number of companies look to take advantage of growth opportunities in the next 12 months, according to research issued today by Clydesdale Bank.

Clydesdale Bank’s latest business confidence survey found that half (47%) of the UK companies surveyed are confident their business will grow in the next 12 months.

According to the new research, just over a third of businesses (34%) believe their company will continue to operate at current levels, while just 14% think their business will see a reduction in trade. However, the research does show that 1 in 25 (4%) companies are fearful that they will go out of business within the next 12 months.

Colin Fyfe, iFS Divisional Director for Clydesdale Bank, commented: “These figures are promising. They appear to indicate that growing numbers of UK businesses are looking to the future more confidently and are beginning to explore opportunities to develop and grow their operations. This is encouraging as where confidence exists, growth often follows.

“It has clearly been a challenging time for businesses and times will continue to be tough. While it remains important for businesses to retain a grounded and balanced perspective, a growing number will be looking at how they can take advantage of emerging market opportunities.”

Despite signs pointing to returning confidence, the research also shows that times remain tough with eight out of ten (79%) companies not finding business getting any easier. Half (50%) of these businesses cite the uncertain economic and political environments as key reasons for this.

Clydesdale Bank recently launched a new business support initiative - Investing for Growth - to help successful businesses grow and develop by easing their cashflow pressures. The initiative offers both new and existing business customers a dedicated planning service and a more flexible approach to lending.

Colin added: “As we can see from the research, confidence is beginning to return but many of the pressures remain. While most businesses are confident that they will succeed, ensuring they have the right level of support is key. Clydesdale Bank’s Investing for Growth initiative is designed to help businesses to take advantage of quality growth opportunities.

“While it won’t be right for every business, Investing for Growth will provide businesses with investment finance to increase cash flow and ease debt commitments. This will help enable companies to invest cash back into their businesses.”

Clydesdale Bank’s research also found that the sectors most confident of growth are IT & Telecoms (62%), Manufacturing (61%) and Travel & Transport (61%). However, the healthcare (27%), education (25%) and architecture (23%) sectors are those most concerned about losing business over the next year.

Regionally, Scotland is the most confident area with over half (56%) of businesses optimistic that they will grow in the next 12 months. Scotland is followed by the North West (51%) and London (48%).

At the opposite end of the scale, a quarter (25%) of companies in the East are predicting a reduction in business, followed by the Midlands (24%) and the South West (23%)

The research also shows that despite broad confidence in their business’ growth, predictions for the economy are mixed. One in four of the businesses questioned (42%) believe the economy will stay the same but almost a third (29%) believes it will improve and 28% think things will get worse.