Businesses say that recovery is finally on its way to the region

HEADING THE RIGHT WAY Julie Palmer, partner at Portsmouth-based insolvency firm Begbies Traynor
HEADING THE RIGHT WAY Julie Palmer, partner at Portsmouth-based insolvency firm Begbies Traynor
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THINGS are looking up in the economy, a new report has suggested, but there is still a long way to go until it stabilises.

Regional insolvency trade body R3 has released its Business Distress Index for the wider Portsmouth area.

In it, 59 per cent of small and medium-sized businesses agree with chancellor George Osborne that the economy has moved from ‘rescue to recovery’, while 38 per cent of respondents disagreed.

Julie Palmer, a partner at Portsmouth-based insolvency firm Begbies Traynor, and a member of the R3 council, said: ‘There has been plenty of positive economic news recently, but it’s important that we don’t forget that a lot of businesses, small businesses in particular, still feel they have significant hurdles to overcome.

‘Now isn’t the time for complacency.

‘Larger businesses may well be confident that they can ride out any remaining bumps on the road to recovery, but small businesses still face significant pressures, whether it’s access to finance or simply the pressures of growing demand.

‘It is easily forgotten that one of the most dangerous times for a business is immediately after a recession, when a lack of investment as a result of recessionary cutbacks and the stress of servicing growing demand take their toll.

‘While it might look like economic recovery is taking place, it may not feel that way for businesses on the frontline just yet.’

Ms Palmer says that south east businesses’ rosy outlooks could be attributed to the fact they are doing well.

R3’s latest Business Distress Index finds the region’s business community in increasingly robust shape.

A whopping 71 per cent of businesses report no key sign of business distress – decreased profits, decreased sales volumes, regularly using the maximum overdraft, falling market share, redundancies.

At the same time, 60 per cent of businesses are reporting at least one sign of growth – such as investing in new equipment, business expansion, increased sales, increased market share, increased profits – up from 48 per cent in March this year.

Ms Palmer added: ‘The falling levels of business distress are very encouraging, although we still have to play the waiting game on the growth indicators.

‘If economic growth is to be sustained, we will need to see improvement in the growth indicators in the coming months.’