Sales slump ‘worse than the 1990s recession’, says reportJan 12, 2012
However, its Quarterly Survey of Small Business in Britain, produced with the Association of Chartered Certified Accountants, has found that the current economic downturn has so far had a less visible impact on SME employment levels due to the growth in part-time jobs and the self-employed.
Apart from those in retail and construction, small firms have made a quicker initial recovery from the recession this time around, though recent evidence suggests that the growth in the sales balance appears to have stalled since the end of 2010.
In the fourth quarter of 2011, the UK’s SME’s reported a further slight decline in sales performance. With sales expectations for the next quarter at the same muted levels, there seems to be no immediate prospect of an uplift, the report states.
However, there is a degree of optimism in the manufacturing sector with SMEs reporting the best sales performance, employment growth (+12%) and investment performance (+12%).
The study also revealed that more than a fifth of the firms which are not currently employers expect to close their business within the next three years. However, relatively large firms are much more optimistic, with those currently employing ten or more people expecting to recruit rather than cut staff.
Professor James Fleck, Dean of the Open University Business School, said: “The survey shows that while the manufacturing sector may offer some grounds for optimism, other sectors are facing severe problems. For example, small retailers have seen sales fall continuously over the past four years and there is no immediate prospect of an uplift.
“We are also picking up signs of distress among the very smallest firms and in those most heavily involved in supplying the public sector.”