Further evidence that West businesses are seeing signs of an upturn has emerged from a survey by R3, the insolvency trade body – although nearly half the firms taking part disagree with Chancellor George Osborne that the UK economy is in recovery mode.
R3’s latest Business Distress Index (BDI) reveals that the 81% of the region’s businesses report no key signs of business distress while 64% show at least one sign of business growth.
Business distress signs such as decreased profits, reduction in sales volume, fallen market share and regularly using the maximum overdraft and redundancies have dogged many West firms throughout the downturn. But according to the six-monthly survey, those witnesses none of these climbed by 25 percentage points in March to 81%.
In other good news, the percentage of companies reporting at least one sign of business growth such as increased profits or market share has risen from 56% to 64% since March.
However, despite the more positive outlook, 49% of firms believe the Chancellor is wrong to announce that the UK has now moved from ‘rescue’ to ‘recovery’.
Chair of the R3 South West and Wales region Joanne Rumley said: “UK-wide figures may indicate a healthier economy but it is still likely to be a long and sometimes bumpy road to full recovery for some businesses. Businesses in our area are keenly aware of this, perhaps explaining their reluctance to proclaim a ‘recovery’ at this stage.
“Many West companies know that economic recovery can be tricky to negotiate given the stresses and strains of business expansion. However the latest Business Distress Index shows businesses in the West are increasingly well placed to deal with the challenges ahead.”
Ms Rumley, partner at law firm Bond Dickinson, added: “We would expect the economy in the region to gradually grow over the next 12 months but we would urge any businesses worried about their long-term health, to seek the advice of a professional sooner rather than later.”
