UK Business Barometer

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Thursday, April 7th, 2004

The March Survey asked for views on absenteeism, insurance, impact of the Budget, the risk of failing and whether 'entrepreneurship' runs in the family. Two questions, both on the impact of the Budget on businesses, called for free-format responses and the responses to these will be published later.

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• About the respondents

  150 respondents were drawn with the following population characteristics:

  Sector
  Production & Manufacturing	Distribution	Services	Total
  28.7%	5.3%	66.0%	100.0%

  
  
  

  Turnover (£)
  < 1 M	1M-3M	>3M	Total
  68.0%	19.3%	12.7%	100.0%

  
  
  

  Number of Full-time Employees
  1-10	11-20	21-50	51-100	100+	Grand Total
  53.3%	33.3%	6.7%	3.3%	3.3%	100.0%

  
  
  

• Survey Findings

• Several recent reports on absenteeism suggest that levels and costs to businesses are substantial and hard to reduce. The March survey asked if absenteeism is a problem for panellists' businesses, and in the parallel survey of business advisers, the UKBAB, advisers were asked if absenteeism is a problem for their clients' businesses. The results suggest that for smaller businesses at least, like those included in or covered by the survey panels, absenteeism is not a problem to the majority. 56% of UKBB respondents and 59% of UKBAB respondents said that it was unproblematic or nearly unproblematic although 16% of UKBB and 11% of UKBAB said that it was either problematic or highly problematic.

  
  

  

  
  
  
• Business insurance has increased steeply in recent years, especially in employers' liability insurance and we have previously asked questions about affordability. In February 2003 we asked to what extent panellists thought increases in insurance premia would lead to under-insurance, and 48% thought this was highly likely. However, 64% of respondents to this March survey feel they are neither over nor under insured, and although 10% of respondents to the business advisers survey didn't know if clients were appropriately insured, from those who did, as shown in the chart, 52% thought that clients' insurance was at an appropriate level.
  
  
  

  

• Post-budget, the UK Business Barometer asks how panellists view the impact on their businesses, and the UK Business Advisers Survey asks how respondents view the impact on clients' businesses. There was close agreement between the two groups in the proportion that feel the impact will be neutral, with 58% of UKBB and 57% of UKBAB. Very few of either group think there are likely to be positive or significantly positive effects:2% in each case. The remainder, 40% and 41% respectively, all expect a negative or significantly negative impact.
  
  
  

  

• Looking at the risk of complete failure of the business, compared with this time last year, more UKBB respondents are optimistic. There was a 6% swing from thinking the risk of failure is greater than a year ago, to thinking the risk of failure is lower than a year ago.
  
  
  

  

  
  
  

  The proposition that entrepreneurship runs in the family was defeated in this survey! 59% of respondents do not come from a family that ran its own business.

  
  
  

  

  
  
  Constraints on business due to skill shortages have continued to ease back on average during the last quarter and this is most apparent in businesses with turnovers of more than £1M, and in the Distribution sector. Constraints due to lack of finance increased on average, most among higher turnover firms of over £3M and in the Distribution sector.
  
  
  
  
  
  

• Constraint due to low market demand increased, on average, in the March quarter, back to the September 2003 level. The greatest increase was in businesses with turnovers of more than £3M, and by sector the greatest increase was in Services.

  

  
  
  

  Average growth in the last quarter was relatively stable, but within this, companies with turnover of over £3M expanded slightly while those with turnover between £1m and £3M declined somewhat. The weakest sector amongst respondents was Distribution.

  

  
  
  

  Overall, respondents expect a small decline in the next quarter, particularly in companies with turnover of £1M - £3M. Businesses in the Distribution sector expect positive growth, while the Production and Manufacturing and Services sectors on average expect a small decline.

  

  
  
  
  Listed below are extracts from feedback received in Survey BB70 March 2004.

  Comments are listed under sector headings.

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

  Retail

• Main danger is from Dept of Health? Imposing a new NHS Contract and at the same time increasing pressure on our entrepreneurial profits from generic purchasing

  Wholesalers

• . Having experienced a major loss to our business 3 years ago, I believe there are many aspects of insurance that are either misunderstood or not understood by company directors, which can be tragic!

  Other

• Sorry but in the end I feel that the government only looks after themselves regarding wages and pay rises. I have lost so much in the past 3 years from pensions and shares you would not believe it. I will now have to work until I am 65 to try and make up some money .No one else cares what I will have to live on when I retire, except ME.. I am not the only person this has happened to. Wages are going down I would like to know where these people work who get £16/£18 per hours.

• Extremely easy to complete, well done. Simplicity works!