CBI: British SME’s optimistic for the future

Despite many SME’s seeing a decline in business in the third quarter, the majority of them are still positive about the future according to the Confederation of Business Industry.

A large majority of SME’s – about 35% –  saw a decline in the volume of manufacturing output in the three months leading up to October. In comparison, about 22% of the 424 firms questioned, surprisingly reported a rise in demand. Overall, a large percentage of Britian’s SME’s said they were feeling confident about the future, with many expecting a rise in demand in the fourth quarter which should see many order books stabilised. Business confidence in entrepreneurs is now the highest it’s been since early 2007.

Despite the new-found confidence the CBI says small and medium businesses still face two main problems in this economic climate. The first being lack of available credit. SME’s are still struggling with a lack of available credit, which implies banks are doing less, rather than more, to help out the business sector. The second major problem is lack of demand from overseas. Demand has fallen sharply in the last few months meaning many businesses are now having a very tough time.

Consumer confidence is also at an 18-month high according to new research out today. A report out by the British Retail Consortium (BRC) shows that the public are feeling more confident about finances and job prospects than they were in April, when confidence hit an all time low.

Stephen Robertson, the BRC’s director general, said: “Our figures suggest it will be a long, slow climb out of recession for many customers, but some do now have their feet on the first rung of the ladder. There’s no question the general mood of customers is better than a year ago, when conditions were dire, but improvement has been slow so far.”

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