Mixed views on trade prospects

Businesses are becoming more optimistic over trading but recruitment won't pick up yet, says survey

Businesses are becoming more optimistic over trading prospects, but few plan to recruit as the recession continues to batter corporate Britain, a survey has revealed.

More than 69% of firms said they do not plan to recruit job seekers or graduates over the next three months, according to the latest business survey by the British Chambers of Commerce (BCC).

However, the poll of 430 companies showed improving confidence, with higher expectations for turnover in the next three months.

The BCC said 29.7% expect sales to increase by up to a quarter over the next three months, which marks an improvement on the previous survey result of 22%.

And fewer companies foresaw a fall in turnover, at 25.5% compared with 31% in the January study.

While the results further fuel hopes that the worst of the recession is over, the BCC said the study showed companies were still being "hamstrung" by issues, such as late payments.

More than half of those surveyed said debtor payment times were taking longer, which is putting cashflow under pressure and having a knock-on effect on areas such as recruitment, said the BCC.

The Government's measures taken so far to help businesses also got a poor reception, with more than 57% saying they had failed to benefit at all from action taken.

The Chancellor's Budget was, meanwhile, given a dire average score of 2.6 out of 10 and more than three quarters said the temporary VAT cut from 17.5% to 15% had not impacted their business at all.

David Frost, director general of the BCC, said: "More needs to be done to improve the cashflow 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."