Thursday, March 7th, 2002

The February Survey looks at the impact of Insurance cost increases, availability of spare capacity, and whether grants and subsidies influence investment plans. Aspects of the Internet, Broadband and ICT were also surveyed, plus our core trends questions. Results are summarised here but for the complete analysis please visit results.

  • About the respondents

    139 respondents were drawn with the following population characteristics:

    Sector
    Production & Manufacturing Distribution Services Total
    34.5% 9.4% 56.1% 100.0%


    Turnover ()
    < 1 M 1M-3M >3M Total
    61.9% 22.3% 15.8% 100.0%


    Number of Full-time Employees
    1-10 11-20 21-50 51-100 100+ unknown Grand Total
    38.8% 39.6% 8.6% 5.8% 4.3% 2.9% 100.0%


  • There has been considerable recent publicity about substantial increases in insurance premia, especially to businesses. Most businesses have reacted to this sensitive issue and in 11% of cases it has highly affected the amount of cover chosen. 21% of respondents fell into the second most affected category and a further 37% have been affected in their choice to a lesser degree. 32% of respondents have not let the increases in premia affect the amount of cover bought.

  • With talk continuing over the last six months of possible recession or stagnation, a question on capacity now available for short term output growth was relevant. 36% of respondents report that they are currently working at between 90% and 100% capacity, and 42% more are working at between 70% and 90% capacity. A minority (21.6%) of businesses are working at below 70% capacity at present.

  • When making new investment plans, a substantial proportion of respondents, 59%, are either not influenced or are little influenced by grants and subsidies although grants and subsidies do influence the investment plans of 31% somewhat, and 10% of businesses' decisions are highly influenced by them.

  • Over the last twelve months the importance of the Internet to a majority of respondents has grown. 55% say the Internet is more, or much more, important to them than a year ago and only 3% report a decrease in importance to their businesses. However, if the Internet were to collapse tomorrow, for ever, 20% of respondents would expect no impact on their businesses, 31% would expect a small impact, 40% slightly more impact and 9% would experience a catastrophic effect.

  • Looking to future developments, 37% of respondents don't know how easy it is to get advice on the benefits and practicalities of Broadband. To 32% it is very or fairly easy to get that advice but for 29% it is very or fairly difficult to get it. 40% of respondents indicated that they are most likely to obtain advice on new developments in ICT through networking and personal contacts. Second most popular choice for sources of advice on this topic was the regular PC supplier at 19%, followed by specialist press media at 17%. The general media provide a further 14% with their information and only 9% look to Government initiatives, Business Links or seminars for their advice.

  • The Core Questions responses showed the following results this month:

  • In February, the overall constraint on businesses due to shortages of skills fell back slightly across all sectors and sizes of business.

  • The average level of business constraint due to lack of finance was also slightly lower except for businesses with turnover of between 1m and 3m.

  • Average constraint due to low market demand increased in February following a drop in January but again with the exception of businesses with turnover in the 1m - 3m bracket, where there was an average decrease.

  • The profile of growth over the last three months in February showed a small upward change from January.

  • Expectations about growth over the next three months were still optimistic overall but this shows mostly in the Distribution sector and in firms with turnovers in excess of 1m.

Listed below are extracts from feedback received in Survey BB45 February 2002.

Comments are listed under sector headings.

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

Retail

As yet the costs for insurances for the current year have not been given and until that time we do not know what the increases are if any, and how they will effect the business. Certainly we would be living in a make believe world if we thought they were going to be reduced.

Want broadband at work-- currently unavailable and unlikely to be available in our village in the near future. Currently using isdn, broadband is so much faster we have it at have at home.

Business Services

Interest rates look as though they are going to rise but by how much and when remains a mystery, this will much more impact on business added to which the question of joining the Euro remains uncertain again fuelling uncertainty which is not good for business planning.

The sumggling of illegal cigarettes and tobacco products still greatly affects our market demand

.

Re Q7 (Where are you most likely to obtain advice on new developments in ICT?) We have our own information systems department with responsibility for scanning long and short term technical developments in ICT. They use a wide variety of sources but rarely Government.

Production & Manufacturing

The rubber industry is suffering at the moment, due to lack of demand. Fortunately, we have a broad customer base and can spread the problems.

Construction

We are surprised that Sept 11th is suddenly having a marked effect either in fact or as an excuse for delay in projects.

Wholesale

Re Q1 - Insurance - (To what extent have recent increases in Insurance Premia affected the amount of cover you choose? )

Our insurance costs have gone up by 20% - we cannot have less cover so we just have to put up with the rise !

Other

Cost of professional indemnity has increased significantly as a result of safety issues in the railway industry. Has resulted in increased prices to customers.

I particularly liked Q6. (Broadband availability for connection to the Internet is growing. From your perception, how easy is it to get advice on the benefits and practicalities of broadband? ) What a minefield this is .. alongside telephones and telephone systems ..pricing and the difficulty of establishing what is a good deal.

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