A new survey carried out among Swindon companies indicates that nearly half believe the recession is ending, with sales likely to increase in the next three months.
The first Swindon Strategic Economic Partnership business survey conducted during May has provided some optimism for the near future, with 78 Swindon companies across all sectors reporting that the previous three months have been difficult, but that this trend may be bottoming out.
The survey, conducted in partnership with Swindon Chamber of Commerce, GWE Business West and the Federation of Small Businesses, reported that the majority of firms saw a decline in UK and export sales within the last quarter. The two major concerns of just over a third of businesses were cash flow and sales volume/value.
The main piece of positive news from the survey was that nearly half of all respondents were confident that sales would grow over the next three months, with a further quarter expecting sales to continue at their current level. Two thirds of firms also expect employment levels to stay the same.
Full survey details are available on www.ssep.org.uk, and the survey will be tracking Swindon organisations’ views on business conditions every month.
Bill Cotton, head of the economic development unit at the borough council, said he welcomed the positive views and encourage more Swindon businesses to participate via the SSEP web site.
While slow payments and lack of orders remain a problem for Wiltshire businesses, many are now seeing signs of improved conditions. However, most companies questioned believe that the recession will really begin to lose its grip in September and the latter part of the year.
“There is no doubt that confidence is increasing, and many economic indicators support the view that things are improving, but it will take time for some sectors to see any light,” said one managing director.
Lack of confidence and poor credit facilities offered were cited as the main causes of continuing problems for smaller companies, although banks are reported to be easing the tight lending conditions imposed earlier in the year.
Alan Barlow,who deals with SMEs at accountants Morris Owen,said: “Poor cash flow is a direct result of this lack of confidence, which has resulted, quite understandably, in companies holding to back on non essential goods and services in order to ensure that they can pay the essentials, such as rents and salaries.”
He points out that Swindon’s local economy is highly dependent upon the activities of the Honda factory, which is now in operation again after a three month shut-down.
“A lot of businesses are reliant on Honda, and retail spending in the town is also influenced by people the spending power of Honda employees,” he added. Many retailers are eagerly awaiting the return of this money into the local economy.
Nevertheless, recession is still causing companies of all sizes to make savings, including pay reductions and redundancies. Reckitt Benckiser, household goods company, is moving around 100 jobs from West Swindon to other UK offices, while
Commercial property demand in the Swindon area, a clear indicator of business confidence, has shown only slight improvment since the start of the year according to agents, who also believe that September could see the beginning of real recovery.
Philip Loveday, senior partner at surveyors Loveday and Loveday, said: “In all property recessions there is always a time lag both going in and coming out. I believe we have actually been in recession for two years, but the full effect on commercial property, not helped by changes in empty rates, has only been seen in the last six months. I am confident 2010 will see us on the upward slope again, albeit from a reduced base level”.
