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Small business expects slowdown

Tom Stevenson
Tuesday 17 October 1995 18:02 EDT
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Small companies are less optimistic about business conditions than they were both six months and a year ago, with order books, output expectations and employment levels all deteriorating.

A survey commissioned by SBC Warburg showed that a balance of only one fifth of the 1,000 companies questioned were more optimistic than three months ago. Similar surveys in March and last September had more optimistic balances of 33 and 57 per cent respectively.

Darren Winder, UK economist at SBC Warburg, said: "The general weakening in economic activity evident in official statistics since earlier in the year appears to be affecting both small and large companies alike. Business optimism is very definitely on the wane at the current time."

Optimism on growth and orders fell most sharply among industrial companies where one in 10 businesses said they intended to reduce their workforces. In February one in seven companies expected to increase their staffing levels.

The survey covered more than 1,000 chairmen, chief executives or finance directors of quoted companies with market capitalisations of under pounds 320m.

Other findings included widespread discontent with current corporate governance guidelines; 73 per cent of companies considered that the cost of complying was not justified by the benefits gained.

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