West Midland small businesses are “holding their breath” to see whether a recovery materialises despite tentative signs of trade levels improving.

The Federation of Small Businesses’s Snap Poll for June 2009 found the proportion of West Midlands-based small businesses reporting an increase in trade had doubled to 20.9 per cent since November last year when just 11.2 per cent reported good news.

But West Midlands Federation of Small Businesses (FSB) policy chairman David Caro was cautious about whether the data could be interpreted as a sign of recovery.

He said: “It’s a situation of holding one’s breath and hoping this is the start of a recovery not just a summer blip.

“There is probably a knock-on effect from Land Rover putting on an extra shift which helps people in the automotive sector.

“Companies are wary because they have been bitten before.

“It wouldn’t take much to turn it back around though – it’s a case of let’s take it steady,” he said.

Compared to the national picture, the region’s small businesses are lagging behind in terms of improving trade levels – 23 per cent of national FSB members noticed a rise compared to 16 per cent in February.

The FSB said: “A comparison of FSB data suggests that the economic position small businesses are in is starting to improve since a low point at the end of last year.”

The number of businesses in the West Midlands saying trade is holding steady increased with the figure now at 30.6 per cent. But 50.2 per cent of urban businesses in the West Midlands are experiencing a decrease in trade – the greatest level in the UK, above the national average of 44 per cent.

In terms of access to credit, over a quarter of respondents in the region reported increased costs for existing finance arrangements.

New credit has become significantly more expensive than existing credit with over 40 per cent of respondents seeing increases of between four and seven per cent.

Mr Caro said: “Members can get access to credit more easily but the costs have risen. It’s not so much the interest rates but the costs of setting up the facility.”

But he said that businesses in the West Midlands had been lucky because there was better access to finance schemes like the Advantage West Midlands Transition Bridge Fund and the region’s community development finance institutions such as ART which are financial initiatives for social, economic and physical renewal in under-invested communities.

Rural businesses in the West Midlands were the least likely to see increased costs for existing finance, the survey also found.