Late payment remains the big problem but turnover expectations improve

The latest British Chambers of Commerce (BCC) Monthly Business Survey published today, reveals the extent of the problem businesses face with late payment and confirms their recruitment intentions over the summer months.

The results from 430 companies across the UK show that half of businesses (50.6%) feel payment times are taking longer, emphasising the continued pressure on cash flow. Worryingly for job seekers and new graduates, just 30 per cent of businesses are planning to recruit over the next 3 months.

Other key findings in the survey include:

• A month on from the Chancellor’s Budget, respondents were asked to award the measures a mark out of 10. Over one-third of respondents awarded the lowest mark of 1, with the average score only slightly better at 2.6.
  
• In a sign of increasing business confidence, company turnover expectations for the next 3 months have all improved. 30% of firms now expect turnover to improve by 0-25%, which is up from 22% in January’s monthly survey.
  
• 30.9 per cent of firms will attempt to recruit in the next 3 months while 69.1 per cent will not.
  
• One in ten businesses are spending over 20 hours every week complying with employment law.

Commenting, David Frost, Director General of the British Chambers of Commerce (BCC) said:

“These results show just how tough cash flow conditions are, with half of businesses hamstrung by increasingly late payments. The knock-on effect is that under a third of employers are planning to recruit over the next three months.

“More needs to be done to improve company cash flow and prevent the steady rise in unemployment. It is clear from this poll that the help on offer in the Budget fell short of many businesses’ expectations. Announcing a moratorium on new employment law and scrapping the planned rise in national insurance would certainly send a signal that the government is serious about supporting jobs.”

Ends

Media Contact:

Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.uk

Notes to Editors:

The survey was conducted between May 15 and May 22, 2009.

Responses were distributed throughout the UK. There were 431 responses in total. Of the responses, the size break down of firms is as follows:

0-9 Employees: 47.6% of respondents
10-49 Employees: 28.5% of respondents
50-99 Employees: 10.7% of respondents
100-249 Employees: 4.6% of respondents
250-499 Employees: 3.5% of respondents
500+ Employees: 5.1% of respondents

Government Measures During Recession

Businesses were asked which one of a list of Government measures will benefit them the most during recession. The responses were as follows:

16.5% stated the extension of the HMRC Business Support Measures
8.1% stated the extension to loss-carry back
8.8% responded in favour of the first-year capital allowances
6.5% opted for the spreading of business rate payments
2.3% chose trade credit insurance scheme
57.1% responded with none of the above

Budget Score

Respondents were asked to award the Budget a mark out of 10 (with 1 being the lowest and 10 being a perfect score). Over one-third of respondents awarded a mark of 1 to the Budget, with the average score being 2.6.

Debtors’ Payment Times

Businesses were asked whether it is taking longer or shorter period for debtors to pay them in comparison to 3 months previously. The responses are as follows:

50.6% responded that it was taking debtors longer to pay in comparison to three months previously.
46.4% stated that it was taking the same amount of time in comparison to three months ago.
2.3% responded that it was taking debtors less time.

VAT

The VAT question was the same as one asked in January, the results of which are bracketed after this month’s results which are as follows:

11.4% (8%) of businesses stated that the VAT cut had benefited their business.
76.6% (76%) of businesses stated that the VAT cut had had no impact on their business.
12.1% (16%) stated that the VAT cut had been a burden on their business.

Turnover Expectations

This, again, is a repeated question running from January, asking about turnover expectations over the next three months. January’s results are in brackets:

2.3% (2%) stated that they expected turnover to increase by more than 50%
2.3% (4%) stated that they expected turnover to increase by 25-50%
29.7% (22%) stated that they expected turnover to increase by 0-25%
34.1% (26%) expected turnover to stay the same
25.5% (31%) expected turnover to decrease by 0-25%
4.6% (12%) expected turnover to decrease by 25-50%
0.9% (2%) expected turnover to decrease by 50-75%
0.2% (1%) expected turnover to decrease by 75-100%

Business Crime

14.2% or respondents stated that they had experienced a rise in crime since the start of the economic downturn (86% stated that they hadn’t). Of the crimes that had witnessed an increase, theft, vandalism and anti-social behaviour were the most prominent.

Employment Law

Businesses were asked how many hours on average per week they spent complying with employment law. The responses were as follows:

70.3% responded up to 5 hours
8.4% responded up to 10 hours
4.9% responded up to 15 hours
1.9% responded up to 20 hours
10.7% responded more than 20 hours

Recruitment Intentions

Asked if the business will be recruiting staff over the next three months, 30.9 per cent stated yes and 69.1 per cent stated no.

The British Chambers of Commerce (BCC) is the National Voice of Local Business.
The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce serving business across the UK, which employ over five million people.