Recovery remains fragile for county

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THE county’s economic recovery remains fragile, according to two separate business surveys.

The first, the latest quarterly survey conducted by the Hampshire Chamber of Commerce, has revealed difficult trading conditions remain the norm for many businesses.

The survey found that only one in five companies in Hampshire took on staff compared with 28 per cent who expanded their workforce in the first three months of the year.

Only 16 per cent of respondents said they were working at full capacity, seven per cent fewer than in the previous survey, and inflation remains a top issue of concern for the third quarter in a row.

Also, 16 per cent reported improved cash flow compared to 31 per cent who did before.

Captain Jimmy Chestnutt, chief executive of the Hampshire chamber, said: ‘Solid economic growth remains fragile in our region with many threats to business.

‘Cash flow is still a real problem, particularly given rising inflation and high fuel prices.

‘We understand that difficult measures are needed to cut the public deficit but the government must put even more effort into helping the private sector increase productivity and create more jobs. There is precious little room for complacency on the issue of business support.’

Meanwhile the second survey, conducted by Baker Tilly, agreed.

The report was conducted using owner-managed businesses across the south east, but the message remained the same.

While respondents showed increased confidence in their businesses, they were less optimistic when questioned in more detail.

Only 42 per cent expect an increase in sales volume compared to 65 per cent in 2010, with just 23 per cent expecting to see an increase in gross margin.

And 26 per cent of regional respondents expected their number of staff to decrease this year.

Mike Blain, based at Baker Tilly’s Hampshire office, said: ‘Rising interest rates, increasing commodity prices, sovereign debt issues and public sector austerity will continue to cause concern.

‘As a result, businesses should not fall into a false sense of security; maintaining cost control, keeping a close eye on cash and ensuring efficient working practices are going to be key.

‘Businesses still need to be vigilant and careful about how they navigate their way through this “stop go” recovery.’