No sign of green shoots

Published:  23 April, 2010

LONDON: Hopes of an improvement in business conditions for small and medium-sized merchants remain low following the first quarter of 2010 according to new research by Aviva.

When questioned, 60% of small and medium-sized enterprises (SMEs) said they expect conditions to "remain difficult" for the rest of 2010 and a further third (32%) believe there is a "real risk" of a double dip in the economy.

By contrast, only 14% were optimistic that green shoots would appear during 2010 and only 9% had seen their prospects actually improve during the first three months of the year.

David Bruce, commercial product manager at Aviva, said: "Officially, the recovery started towards the end of 2009, but for many businesses green shoots have yet to appear.

"Small business owners remain resolute and resourceful, but they continue to need support and advice. With the election just a few weeks away, many will no doubt be looking for further clarity on the key policy pledges that will have a tangible effect on their bottom line."

Cashflow remains the most pressing item on SMEs' business agenda with 33% stating that this will be their biggest worry in 2010, rising to over 40% for shopkeepers, salon owners and tradesmen.

Other worries include the fear of declining sales (28%) and concerns of the consequences of any potential rise in Vat to 20% (17%).

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