BusinessCompany NewsSmaller business sector ‘indifferent’ over 2005

Smaller business sector 'indifferent' over 2005

The UK's small business sector is entering the New Year with 'no great confidence' in what 2005 may hold - the first time this response has been voiced in its quarterly survey, says KPMG.

Link: Deloitte predicts 2005 profit gloom

Almost half of the respondents in the firm’s latest study of small and medium-sized businesses claimed to be indifferent about the prospects for businesses in their sector in 2005.

KPMG said this represented a ‘major turnaround’ from nine months ago when 67% of SMEs thought that business prospects were good, compared with only 24% who were indifferent.

Some 20% of respondents called for reduced interest rates, while 72% felt rates should be held. The firm said that this figured represented a ‘significant’ increase in the number of businesses beginning to once again see interest rates as a major factor.

Mel Egglenton, head of middle market at KPMG, said: ‘the first seeds of doubt are definitely starting to appear, with more and more businesses registering concerns over the economy.

‘This is evidenced by the fact that 45% of respondents feel that the UK economy is either at the bottom of the cycle or at least on a downward curve. When you consider that this has risen from 23% just six months ago, you have an idea of how quickly perceptions have changed.’

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