Partner Article

2012 outlook leaves entrepreneurs feeling pessimistic

High numbers of UK entrepreneurs feel pessimistic about the 2012 economic outlook according toa new survey by Investec.

The Entrepreneurs Confidence Index, which tracks confidence levels of mid-market UK entrepreneurs found that only 13% of business owners expect the economic climate to improve over the past year.

Almost 40% expect some deterioration to occur, while around 10% expect considerable deterioration. These figures indicate that optimism is at the lowest level since the index was launched in December 2009.

Despite the overwhelmingly negative general outlook, business owners appeared to be more hopeful about their own enterprises. A fifth anticipate growth of more than 20%, while 86% expect the profitability of their UK business to grow during 2012.

Ed Cottrell, Investec said: “The ‘Entrepreneurial class’ are often naturally optimistic, so we are not particularly surprised that despite them anticipating a decline in the UK economy, many have high hopes for their own businesses, and perhaps see opportunities in the current climate.

“Indeed, half of those entrepreneurs interviewed said that they were planning to make at least one small acquisition this year.”

High levels of optimistic entrepreneurs is good news for job creation, and 63% of entrepreneurs plan to increase the number of people they employ, with only 13% planing to reduce their headcount.

The Eurozone was said to be their biggest concern, with almost half of all entrepreneurs believing that the current situation was a ‘high’ risk, followed by access to capital.

Mr Cottrell addded: “Some 84% said that they were going to focus on growing their businesses organically.

“This helps explain why 56% of entrepreneurs plan to increase spend on research and development and only 15% anticipate making cuts here.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .