North East SMEs fear economy will take years to recover

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

SMEs in the North East fear the economy will take years to recover
SMEs in the North East fear the economy will take years to recover

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.”

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