Mixed fortunes
Sep 02 2009
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There are so many conflicting indications as to whether or not business is picking up, you can’t help feel that consulting Mystic Meg might be the best way of gaining a clear vision of our economic future.
On the one hand business confidence is at its highest in 18 months, the economy is contracting at a slower rate than expected and the housing market is beginning to stabalise. Simultaneously, we are told that business investment has fallen by ten per cent since the last quarter, bank lending continues to plummet and retail sales stagnate.
Our recent poll reflects the turmoil among SMEs. Some 61 per cent of you said the environment was still very bad, while a substantial minority (30 per cent) believe business is looking up (particularly with regards to customer spending).
Although this isn’t news that is likely to make anyone crack open the champagne just yet, a fledging recovery in certain areas seems to be on the cards.
Speaking to SmallBusiness.co.uk, David Kern, chief economist at the British Chambers of Commerce, said: ‘At the moment we are at a critical turning point, things could get better or they could actually get worse.’
‘Unless [lending and investment] trends reverse, it will mean that when recovery does come, businesses will not have the capital to proceed. Business is where the recovery will come from, there’s no where else that is wealth-creating.’
We’re no longer in a state of freefall, but that doesn’t mean the economy’s now set for a safe landing. If small and growing businesses continue to be denied credit as confidence returns, we wont need a crystal ball to predict the wider economic impact on growth.
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