Small businesses preach caution but see improving economy

Date: 25th September 2009

Smaller businesses are more "cautious" than their larger peers in tough economic times because they generally have comparatively fewer resources, the Forum for Private Business (FPB) said today (September 25th).

A spokesman for the group commented that tight bank financing conditions had been a key factor behind the prevailing industry mood, with firms feeling more "pessimistic" than before.

These comments follow the release of a survey from Amplify Research earlier this week, which found that 48 per cent of businesses have seen their overall incomes fall by up to 20 per cent in the last six months.

However, there was a consensus among 36 per cent of the survey that the second quarter of the year (April-June 2009) had been the worst period, with conditions having improved since.

This ties in with the view, shared by groups including the National Institute for Economic and Social Research, that the UK has returned to economic growth from the credit crunch-induced downturn over the second half of the year.

The FPB spokesman added: "By nature [smaller businesses] have to be a bit more pessimistic and cautious in these times … access to finance is the big problem, it's holding them back and stopping them from developing the business and expanding."