8th September 2010, 9:03am
Is local economy on road to recovery?
The survey is assessing the health of the economy Businesses in Lincolnshire and Rutland are being asked to give their prognosis on the health of the local economy.

The Lincolnshire Economic Snapshot survey is being conducted by the University of Lincoln’s Business School and the Lincolnshire and Rutland Employment and Skills Board.

The aim of the survey, which will be repeated every two months, is to provide a regular ‘temperature-take’ of the region’s businesses. It explores issues such as trading conditions, access to finance, employment and training, and plans for the future.

The first round was completed in July and received more than 120 responses from local companies. The results show that many businesses in Lincolnshire and Rutland are uncertain about the future of the economy and expect to be adversely affected by pending government spending cuts.

More than three quarters (79 per cent) of businesses surveyed felt the recession is not yet over for them. This is despite figures from the Office for National Statistics showing that, at the end of June 2010, the UK had experienced three quarters of consecutive economic growth.  Less than a third of businesses felt that trading conditions are improving, and access to finance remains difficult for many businesses, with just 10 per cent saying that finance is becoming easier to obtain.

Public sector spending cuts are a concern, with two thirds (66 per cent) saying the cuts are likely to have an adverse effect on their business.

The survey does, however, show signs of optimism. Just under two thirds (60 per cent) of businesses surveyed are planning to expand their activities and 62 per cent are attracting new customers. Over the next six months, a greater number of businesses plan to recruit staff (30 per cent) than reduce the size of their workforce (19 per cent).  A quarter of businesses (24 per cent) are considering offering apprenticeships or internships.

Professor Ted Fuller, Head of the Lincoln Business School at the University of Lincoln, said: "Clearly the effects of the recession are still being felt by most small firms. They've had to be frugal and resourceful over the last two years to survive, but this survey does indicate improvement. The big unknown is the effects of too drastic a cut in public expenditure, which can affect a region like Lincolnshire and Rutland more than wealthier cities. The evidence that banks are still not lending is worrying, given that firms will need finance to grow out of the recession, having used their resources to survive."

Herman Kok, Chairman of the Lincolnshire and Rutland Employment and Skills Board, said: "Business currently operates in a climate of uncertainty whilst we await the reality of government spending cuts. Public sector spending cuts to be detailed later this year will have a much bigger effect on our markets and hence employment. It is important that we have quick and frequent feedback regarding confidence levels of those operating in the Lincolnshire and Rutland economies, and this survey does just that."

The second round of the Lincolnshire Economic Snapshot survey will be carried out in September. Businesses in Lincolnshire and Rutland who wish to take part can get in touch by emailing: economicsnapshot@lincoln.ac.uk.
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