Three quarters of small and medium-sized business in the North East believe it will take at least another five years for the economy to return to pre-recession growth levels.
The latest Bibby Financial Services’ Business Factors Index, which assessed the outlook and performance of SMEs in the region in the three months to June, showed 74% believed it would take until 2018 or later for a full-scale recovery.
Bibby managing director Nick Kindon said: “Despite indications that business conditions in the North East are gradually improving – supported by recent GDP results – the timescale business in the North East is placing on a full economic recovery in the UK is a concern.”
The news comes after last month’s announcement of 0.6% economic growth.
According to the Index, a number of North East firms have seen improvements in the second quarter of the year. However, a third (33%) of SMEs said conditions were tough and, as a consequence, they have had to make cuts in the last three months.
A total of 25% had looked to raise finance from a bank loan and 12% had turned to personal savings for support.
But Pulin Trivedi, head of business at Bibby, the UK’s largest independent invoice finance provider, said: “We would urge business owners to research all the funding options open to them as a more flexible and specialist form of finance may be able to support their future plans.”