Partner Article

Outlook still gloomy say small businesses

Small and micro businesses across the North East are not positive about the future of the regional economy. In recent research from the Federation of Small Businesses in the North East small and micro businesses have reported that both sales and orders are down over the past six months. On top of this many have seen their costs increase with further rise predicted over the next six months.

The majority of members (63%) are not confident about the future of the North East economy which is hampering investment plans and stopping the majority (78%) from taking on staff.

The biggest barriers that small and micro businesses are facing at the current time are increasing fuel costs, late payment and access to finance.

Ted Salmon, FSB North East Regional Chairman, said:

“Times are still tough for small and micro businesses across the North East and we want to see more action being done to help. Our research shows that 46% of members have seen sales decrease and 48% reporting that orders are down over the past six months. Worryingly 63% of respondents don’t expect to see any increases over the next six months.

“The vast majority of our members have reported that costs have risen over the past six months with a further 76% expecting costs to rise further. This is having a massive impact on future investment plans with almost 50% not looking to invest in their business in the next six months.

“These cost pressures are also having a huge impact of the numbers that are seeking to take on staff in the next six months. 76% of respondents that they were unlikely or very unlikely to employ any new staff which will have massive consequences for the North East labour market.

“Small and micro businesses will lead the recovery of the North East economy but clearly need more help to do so. The biggest barriers our members are facing are increasing fuel costs, being paid late and accessing finance especially from the banks.

“For too long small businesses have been treated as extra line of credit by big business. The Government could be doing much more to help small and micro businesses across the North East by tackling big businesses that don’t pay on time. The Prompt Payment Code is being treated by many as a corporate social responsibility policy rather than a serious signal of intent of paying on time.

“We also want to see more being done to help North East small firms get access to credit at a cost they can afford. The banks have a role to play in this but we want to see alternative routes to investment including crowd finance being better communicated as was highlighted in the Budget.”

This was posted in Bdaily's Members' News section by Simon Hanson .