UK Business Barometer

Wednesday, August 22, 2001

Being a holiday period, responses tend to be lower in July and August, but we still had well over 120 responses from smaller firms and businesses. Results are summarised here but for the complete analysis please visit results.

The first block of July Survey topical questions related to the declared intentions of the Government to make it easier for smaller businesses to become suppliers to the public sector. For the vast majority of our respondents this would appear to represent a significant challenge:
Only 1.5% of respondents earn more than half their turnover by selling to the public sector, while 91 % derive one quarter or less of their gross revenue from this source.
While 15% of smaller businesses aspire to sell more in this direction, the remainder don't have any such strategy or are neutral. This result may be influenced by the belief that sales access to the public sector is more problematic generally than business to business sales within the private sector - over 30% of our respondents strongly agreed with this viewpoint, while a further 25% also agreed, and only 9% disagreed at any level.
The other area of attention in July was business to business Internet based trading. We compared the results with the same questions asked back in March 2000, to see whether use of the Internet by our respondents for trading is growing. Generally it seems it is, but it is a slow process:
Asked to what extent respondents are selling through the Internet, 12% replied in the two top categories, compared to 6% last year. While 40% now say that they sell very little through the Internet, compared to 32.5% in March 2000 this probably hints that some of last times' 'not at all's have now tried Internet sales because although 33% still say they do not use the Internet for sales at all, this compares to 49% last time.
On the extent of purchasing through the Internet, 16% percent rated themselves as doing so highly or nearly so compared to just under 9% in March 2000. The total percentage of those who rarely or never use the Internet for purchasing remained the same at 64%.
The remaining two topical questions were about use of the Internet for monitoring prices. Although this is not a majority activity, nearly 9% do this highly or nearly so for competitors prices, compared to 6% in March 2000, and 13% use the Internet highly or nearly so to monitor suppliers' prices, compared to 8% in March 2000. However 56% still do not look at competitors prices on the Internet at all, down from 66% last year, while 43% do not monitor suppliers prices this way, down from 53% last year.
Constraint on businesses due to shortages of skills has eased a little on average since June, with the percentage of respondents not at all constrained increasing from 12% to 18%.
Business constraint by lack of finance was not significantly changed from the June Survey results and constraint due to low market demand eased a little overall.

10% of respondents reported significant expansion over the last three months, compared with 8% in June. The percentage at the 'expanded somewhat' level was 25% (June 31%).
Although a considerable percentage of businesses (40%) still expect to expand by up to or over 10% in the next quarter, this is lower than in June (42%), and a higher percentage (18%) than in June (16%) expect to decline by up to or more than 10%.

rick.eagles@nottingham.ac.uk / Tel: 0115 84 66860