SMEs downbeat on Christmas and thereafter

by Gill Montia

Story link: SMEs downbeat on Christmas and thereafter

Many of the UK’s small and medium-sized enterprises (SMEs) are braced for a quiet Christmas trading period, according to Aviva’s bi-annual SME Pulse.

Forty-five per cent of firms surveyed said they expect Christmas to be difficult, as consumers curb spending, and 10% predicted that the festive season will be “make or break” for their businesses.

Less than 20% were actually expecting good sales and 40% thought that 2010 had turned out tougher than expected.

The research also indicates that 61% of small business owners expect conditions to “remain difficult” in 2011 and almost a third believe there is a “real risk” of a double-dip recession.

Eleven per cent of respondents said they could cease trading if business conditions don’t change, and only 17% were optimistic about the economy improving next year.

The findings are almost identical to those from Aviva’s April survey, although key issues highlighted in the intervening period include:

An increase in the proportion of SMEs reducing staff pay or hours from 11% to 17%.

A rise in the proportion of SMEs reducing temporary staff numbers from 6% to 16%, while the proportion reducing permanent staff increased from 8% to 12%.

Finally, maintaining cash flow tops the list of SME concerns for 2011 with 33% stating that this is their biggest worry, rising to 36% for those in the professional services industry.