Two-thirds of SMEs fear for their future
TWO-thirds of small and medium-sized firms believe economic conditions could threaten the viability of their businesses over the next 12 months, according to a survey of 500 employers.
The survey showed that business confidence had deteriorated over the past three months. Half of businesses now expect conditions to get worse over the next year. Businesses see the upward trend in exports as the only bright spot in the current climate.
The results are from ISME's third quarterly trends survey for 2010. ISME said the findings were "extremely worrying".
Two-thirds of those surveyed see the economy as "poor" or "very poor". Economic uncertainty is managers' biggest concern, followed by reduced orders, government action and access to credit.
Just one in four companies expects conditions to improve over the next year, compared to almost half of those surveyed who anticipate economic conditions getting worse.
One in four expects conditions to improve over the next 12 months, down from 40pc in the previous survey.
Retailers are most downbeat, with half now less optimistic about their prospects. That's compared to 23pc of manufacturers and 11pc of distributors. Confidence among builders is on the up -- albeit from a low base -- with 5pc of construction companies now more optimistic for the future.
Export-oriented businesses, however, do offer some relief from the overall gloom, with 36pc reporting increased values from exports.
Uncertainty about the future and limited access to capital means owners are holding off on investment.
Just 1pc of companies had increasing investment over the past three months, but almost a quarter expect investment to go up over the coming year.