Despite the economic turbulence, small and medium-sized businesses in the West Midlands have done well in 2008, according to a recent survey.
The research, by business insurer QBE, found 57 per cent of SMEs maintained or increased sales, and the same number expected growth in 2009.
The survey found SMEs remained positive about their outlook for 2009, with 42 per cent confident they would not experience difficulty even if the current climate continued for 12 months. Sixteen per cent of the region’s enterprises reported it would be either very difficult or extremely difficult to survive should conditions remain for a year.
But despite the optimistic results, nearly half of SMEs said they believed these are the most challenging economic conditions they had faced.
The findings make encouraging reading, with many small businesses suffering a in demand in industrial and consumer sectors, as businesses and people look to tighten belts.
The Civil Engineering Contractors Association recently said the country’s infrastructure could be at risk because it expected more than 8,000 redundancies in the UK’s small and medium sized civil engineering firms.
QBE undertook the survey of SMEs in the Midlands and Wales in November. The data gathered and analysed by independent survey company, The Survey Shop, identified a mixed picture of caution in the sector, but positive approaches for addressing difficulties.
Tim Clarke, commercial manager at QBE’s Birmingham office, said: “With the economic downturn well under way, it is promising to see SMEs are not only performing well, but implementing measures and seeking professional advice to guide them through.”
With businesses looking for ways to reduce risks, the survey found SMEs in the North Midlands were acting differently to those in the south.
One in five enterprises in the south anticipate staff cutbacks in 2009, yet only seven per cent in the north are considering this. Both favour an increase in sales and marketing in 2009.
When asked what one thing would make a difference to their business in 2009, one in five North Midlands’ SMEs said a boosted economy and increase in sales, yet only two per cent in the south favoured this, instead preferring a reduction in VAT and corporate tax.
SMEs in the North Midlands, South Midlands and Wales agreed that they expected to increase their utilisation of advisors and insurers, with 43 per cent of respondents expecting to use accountants in 2009, up from the 24 per cent that actually used their services in 2008. This trend was particularly marked in the uptake in SMEs turning to insurers or insurance brokers with 29 per cent expecting to use their services in 2009, up from only 16 per cent during 2008.
This move reflects growing concern about the risks that business is likely to encounter as it moves through the recession, QBE said.
The data for the survey was collected by The Survey Shop between November 13 and 26. Respondents were qualified as owners, managers and decision-makers.