UK Business Barometer

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Wednesday, June 11th, 2003

The May survey looked for views on the Euro, commercial property prices, time off for leisure, hard to fill vacancies, new jobs, visits to UKBB and UK Business Adviser Barometer websites, and regional sales.

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• About the respondents

  181 respondents were drawn with the following population characteristics:

  Sector
  Production & Manufacturing	Distribution	Services	Total
  28.7%	7.2%	64.1%	100.0%

  
  
  

  Turnover (£)
  < 1 M	1M-3M	>3M	Total
  69.3%	17.3%	13.4%	100.0%

  
  
  

  Number of Full-time Employees
  1-10	11-20	21-50	51-100	100+	unknown	Grand Total
  40.9	35.4	6.1	2.7%	2.7%	12.2%	100.0%

  
  
  

• Joining the Euro has been the subject of much debate over the past few weeks, culminating in the Chancellor announcing that the five economic tests have not been satisfied at present. The Business Barometer has been monitoring opinion over the past two years and the result of the May Survey shows a continuation of warming towards joining, although even now the percentage of those in favour still only constitutes a bare majority. This result is closely backed by the result from the May Business Adviser Barometer - the two results are shown in the graph.
  
  
  

  

• The Euro has recently gained strength against the pound and this has influenced over 40% of panellists, one way or the other, in their attitude towards joining. The Business Adviser Survey produced a similar result.
  
  
  

  

• Given the experience of a continuing weak stock market and a strong housing market, commercial property can become the target of financial players. 29% of respondents to the UKBB believe that commercial property prices are increasing, while 41% of Business Advisers responding to the UKBAB have clients that have observed commercial property costs increasing.
  
  
  
• For business people, taking time off for holidays or leisure can be costly and stressful. 47% of those responding were highly or very resistant to it while only 17% said that they were not at all resistant to doing so. The respondents to the BAB survey put it much more strongly - 70% were highly or very resistant and only 2% found that their clients were not at all resistant to taking time off.

  

  
  
  

  Shortage of skills to some extent accompanies the number of hard to fill vacancies. Our quarterly 'core' questions include one on the impact of skill shortages. Over the last year, constraints on businesses due to skill shortages have declined overall, but 25% of respondents currently have hard to fill vacancies.

  

  
  
  

• 56% of respondents to the UKBAB say that more than 25% of their clients have hard to fill vacancies.

• Economic growth mainly arises from the expansion of small and medium size enterprises. However, over the last three months 44% of Business Barometer respondents have created no net new jobs.

  

  
  
  

• Benchmarking against colleagues and interest groups views and attitudes can be helpful in maintaining awareness of developments in business. Two questions referring to use of the Business Barometer and the Business Adviser Barometer results revealed that these sites are currently under-used by their panellists. The identical question was asked to each survey panel in each case.
  
  
  

  The final four questions looked at the dependence of business on the local, regional, national and international economies. Less than 5% of respondents are over 70% dependent on the international economy, but 24% have that level of dependency on the national economy. 20% rely on the local economy for more than 50% of sales and 15% rely on the regional economy for over 50% of sales.

  

  
  
  

  On average, business expectations following recent developments in the Iraq situation seem to be improving. 35% are more optimistic or much more optimistic, with 16% being more pessimistic or much more pessimistic. The views of the remainder are unchanged.

  

  
  
  

  Recent announcements on UK growth rates have been disappointing and many businesses may be looking at their costs. 37% of our respondents would first try savings on investment in plant and equipment and 25% would look to wages and salaries for cuts, while 19% would cut marketing costs as their first choice. Business Advisers were asked which area their clients would look to first, and 47% believe that business would cut training first, while 22% think Investment would be top of the list.

  

  
  
  

  With the latest changes in employment law and access to employment tribunals, and reports of large increases in the numbers of employees lodging cases against employers, especially those running smaller businesses, we asked how many of our respondents had had involvement with employment tribunals recently. 15% have had one involvement, and only 1.2% have had more than one involvement over the last three years.

  

  
  
  
  Listed below are extracts from feedback received in Survey BB60 May 2003.

  Comments are listed under sector headings.

  Views expressed are those of individual panellists and may not represent those of the University.

  Other

  I believe like most people -not happy to loose our sovereignty to Europe, especially the pound for the Euro- we are an island nation who is bed with every one (commonwealth/ USA /Europe) Figuratively speaking. Locking our selves further with Europe cannot be good. Britain is a free trade country..