Small businesses are increasingly pessimistic about the coming year.
Forget the Government and all those learned economists - if you want to know what a recession feels like, ask the boss of a small manufacturing company. The CBI's latest survey paints a grim picture of the sector with orders, output, and jobs falling and expectations of worse to come.
Hardly any wonder, then, that pessimism abounds - overall, 53% of firms are less optimistic about the future than they were four months ago, and plans to invest in new plant and machinery are reportedly at their lowest levels since 1991. Domestic and export prices are plummeting, and anxiety that business may be lost due to political and economic conditions abroad has jumped 8% to 27% since last July. Glimmers of hope are hard to find, although there are claims that the gloomy export situation may be eased by the fall of sterling relative to the euro, as the European Central Bank has committed itself to a strong single currency. Big business might be in for a rough ride over the next year, but it is going to be no picnic for smaller businesses either.
The bad news for small businesses past 4 months next 4 months
Numbers employed -18% -29%
Volume of new orders -38% -32%
Average domestic prices -24% -23%
Average export prices -33% -33%
SOURCE: CBI/Pannell Kerr Foster.