Thursday, April 7th, 2005

For the March survey, we invited panellists to give views on the business impact of the budget, delaying strategic decisions before the upcoming General Election, strategic planning, keeping in touch with contacts, and using temps, plus the quarterly trends questions. The trends charts from the responses to the regular quarterly questions, analysed by size of firm and sector, can be found on the project's website at

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  • About the respondents

    The UK Business Barometer surveys the people running small and medium size businesses. In the March survey 159 respondents were drawn with the following population characteristics:

    Production & Manufacturing Distribution Services Total
    27.0% 8.2% 64.8% 100.0%

    Turnover ()
    < 1 M 1M-3M >3M Total
    71.7% 16.4% 11.9% 100.0%

    Number of Full-time Employees
    1-10 11-20 21-50 51-100 100+ Grand Total
    56.0% 30.8% 5.7% 3.1% 4.4% 100.0%

  • Survey Findings

  • Strong agreement on the first question emerged between respondents to the UK Business Barometer and respondents to the UK Business Advisers Barometer, the parallel monthly online survey of Business Advisers. 74% of UKBB and 73% of UKBAB thought this year's Budget would be neutral for their businesses. Of the remainder, the balance of opinion was that the impact would be negative, with 18% of both sets of respondents in this category.

    We asked the same question before the last General Election, held on 7th June 2001. Circumstances are a little different this time: the question was asked 2 months early this time (before the date of the election was officially announced) but only 1 month early last time. The political atmosphere was also different then, before the Iraq war and after only 1 term of Labour government. These are among the factors which could influence respondents' views but even so the vast majority, 64%, are not postponing major strategic decisions until after the Election, compared to 76% in 2001. However 16% say that they are totally or almost totally postponing, compared to 10% last time.

    Although it is an acknowledged and accepted rule of business that strategy matters and is needed to be successful and to grow, less than half of the respondents to the UKBB have a formal strategic plan. This finding broadly agrees with other surveys and informal straw polls and reveals the potential for improvement if more companies can make time to consider their aspirations and the practicalities of how to achieve them.

    Previous surveys have shown that networking is very important to many entrepreneurs and consultants, and the speed of follow-up to new contacts is an indicator of how pro-actively networking is used in business. Excluding responses of 'not applicable', 66% of UKBB respondents get in touch either the next day or in the following week, and the corresponding figure for UKBAB respondents is 73%.

    Email emerged as the most popular means of follow-up contact for both UKBB and UKBAB respondents, followed by phone calls. Letters were rarely used and texting is very unpopular indeed.

    Temporary staff is used very seldom by UKBB respondents, with 51% not employing them at all and 36% having less than 10% of their workforce filled by temps but 12% of respondents have between 11% and 30% made up of temps. The frequency of using temps to plug short term skills gap is also mostly low, with 54% never doing so over the last year, and 30% only employing them once or twice. However 11% of respondents have had to employ temps more than 3 times over the past twelve months.

    Constraints on business due to skill shortages dropped during the first quarter of 2005. Constraints on businesses with turnover in the 1M p.a. - 3M p.a. range decreased the most with both larger and smaller end businesses staying close to their previous quarter's levels. By sector, skills constraints on distribution increased, while that on both production and services were lower.

    There was a small downwards change in the level of constraint due to lack of finance over the Jan - March quarter. Among firms with turnover of 1M - 3M the decrease in constraint was the largest, with a small increase in constraint in both larger and smaller end businesses. By sector, small increases in constraints occurred in production and manufacturing and also in distribution, with a decrease in the services sector.

    Overall constraint due to low market demand was almost unchanged since December. Under 1M p.a. and over 3M p.a. turnover sized businesses both experienced increases in constraint, while those in the middle bracket of 1M p.a. - 3M p.a. gained from a drop in constraint from low market demand.

    Average growth in the last quarter dropped back a little compared to the previous quarter for firms with turnover below 3M p.a., whereas those with turnover above 3M p.a. experienced some positive growth. The decrease in growth rate affected all sectors.

    Respondents across all sectors expect some growth in the next quarter, although those with turnover between 1M pa and 3M p.a. are more pessimistic and expect a small decrease.