The West’s mid-market businesses see no signs of the region’s economy returning to growth this year, according to a downbeat new survey.
Also they do not believe that the funding environment will improve for at least another 18 months, further restraining growth.
The gloomy outlook emerges from the latest Mid-Market Business Survey carried out among £5m to £100m-turnover companies by accountants and business advisers Grant Thornton.
Exactly half of the managing directors and finance directors polled say a return to economic growth in the region is a year or more away, with a further 37% believing it will be six to 12 months before there is visible evidence of any upturn. However, 13 per cent were more optimistic, forecasting the appearance of growth within the next six months
A solid majority – 58%– do not foresee any easing of access to finance for businesses before 2014 at the earliest, although 37% take the view that this will begin in the second half of 2013.
Likewise 34% believe that ensuring a better flow of finance should be the top priority for the Government, with 26% saying that delivering on its pledges to simplify the tax system and to create a more business-friendly tax regime should be top of the Coalition’s business agenda.
A lack of bank finance was named by almost a fifth of companies when asked to identify the single biggest challenge to their business. Of greater concern was the ongoing effect of public spending cuts – highlighted by 50% as impacting directly on their business and on customers.
However, despite these findings, 61% expect their own business to grow over the next 12-18 months, mainly organically.
Another bright note is that 90% agree that the West is generally “good for business,” citing lower operating costs when compared to London and the South East (46%). The region’s quality of life and sustainability credentials (both 27%) were also identified as positives.
Grant Thornton’s senior practice leader in the region, Nigel Morrison (pictured), said: “Our latest survey confirms that a sustained period of flat economic conditions is set to be the norm for some time to come, with the crisis in the eurozone continuing to have a negative impact on businesses in the West, particularly those which export to the worst affected countries.
“Nonetheless we are working with plenty of dynamic companies which are delivering high growth in domestic and global markets, and this is also reflected in our findings.”
