Businesses in the West Midlands have experienced a significant
downturn in trading conditions in the last quarter and over the
past year, according to the latest Bibby Financial Services'
Business Factors Index.
Nearly one in three (30 per cent) firms in the region says their
business is doing worse than a year ago, compared to just 17 per
cent in Q3 of 2010. The figure suggests businesses in the West
Midlands have struggled to combat the Government's continued
austerity drive over the last three months of the year. The
challenges they have faced in the final quarter of 2010 appear to
have dented their confidence in a full economic recovery, with over
a quarter (27 per cent) believing it could be as far as three years
away. This figure has risen from 22 per cent in Q3.
The latest figures from the Office of National Statistics (ONS)
show that the West Midlands saw the biggest rise in unemployment in
the country, with an increase of 48,000 in the quarter to November.
It is evident that the region is amongst the hardest hit from the
public sector cuts and that the business community will find the
Government's austerity drive, the rise in VAT and a potential rise
in interest rates difficult to combat.
When speaking to small business owners and managers in the West
Midlands the Index, which is a quarterly report that tracks the
turnover levels among Bibby Financial Services 3,800-strong client
base* and the outlook of 300 small business owners and managers
across the UK, also reveals:
Ten per cent of the region's businesses say conditions are
really tough and that they are only just surviving, up from four
per cent in Q3
Sixty three per cent of firms say they are cutting costs to
prepare their business for further economic challenges
David Webb, Bibby Financial Services spokesperson for the West
Midlands, says: "It is disappointing to see that in the last three
months of the year, the region appears to have taken a step
backwards with regards to its economic progress. In Q3 of 2010 the
signs appeared to be promising, with the Index reporting that the
West Midlands was the most stable region in the UK. However, since
then trading conditions appear to have deteriorated, with a much
higher percentage of firms admitting a worse business performance
than 12 months ago.
"With the ONS reporting rising unemployment in the region and
the Birmingham Chamber of Commerce predicting that the situation
will get worse with public sector cuts and rising VAT, there could
be further negative impact on the region's business community.
"Taking into consideration the treacherous business landscape,
firms in the West Midlands will require financial support to aid
them in this post-recession climate. Bibby Financial Services is
intent on supporting businesses with its specialist invoice finance
solutions, which alleviate cash flow worries with a reliable source
of finance, allowing firms to invest funds to stabilise there
business in these difficult times."