Trading life stabilising but recession expected to last

Eighty two per cent of firms said they were operating at about the same level as a year ago, the Bibby Financial Services’ Industry Index reported. In the first quarter of 2011, 29 per cent of business managers and owners said trading conditions were incredibly tough.

Encouragingly, this figure fell to zero in the second quarter, a further sign of an increasingly stable business environment. Some 32 per cent of businesses described current conditions as “okay” and remained “hopeful for the future”, up from just 14 per cent in the first three months of 2011.

However, firms appear less confident about the likelihood of a quick recovery, with 57 per cent believing we could feel the effects of the recession for at least three years, the highest of any region in the UK and up from 39 per cent in the first quarter.

Paul Fraser, Bibby Financial Services’ spokesman for Yorkshire, said: “In the first three months of the year the region’s business community was still feeling the pinch. However, conditions have seemingly improved over the past quarter with more firms feeling a greater sense of security.

“With a growing number of firms reporting they are optimistic for the future, hopefully this quarter will provide the platform for business growth and greater optimism among owners and managers.

“Yet, there is no suggestion that a full recovery is imminent and with the latest UK GDP figures showing marginal economic growth of 0.2 per cent, there remains a danger of widespread stagnation. With this in mind it is more important than ever that firms in Yorkshire have access to the funds required to maintain a healthy cash flow and pursue opportunities for growth.”

The report is based on interviews with 450 UK entrepreneurs conducted by Continental Research.