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playing the percentages

It’s official. We’re out of recession. Or so we’ve been told. Sadly, it’s not what we believe.

The recent announcement that official data had shown that Britain was out of recession was more a case of “aye, right” than cause for celebration. In fact it’s a bit like being told that we have officially moved into British Summer Time when we’re looking at the window at a cold, sleety March morning.

When the media asked us to comment on the official line, our response was that we were encouraged by the optimism and it was consistent with the view that we were heading in the right direction but that we had a ways to go before we were out of the woods and that business would continue to feel the effects of recession for some time to come.

The newly published results of the latest British Chambers of Commerce Monthly Business Survey confirm that is still very much the case. The survey, circulated to Chambers across the country takes a sound bite of business opinion on key issues; the content and questions varying each month according to the most pertinent issues. Highly respected by Government it is an acknowledged and valued source of business opinion.

In response to the question asking respondents whether they felt the recession was over for their business 74.8%, just a whisker off three quarters of all the businesses in the UK which completed the survey answered No. Of greater concern perhaps though is that when asked if the economy would see a double dip recession, just over 75% thought that was Likely or Very Likely.

Very interestingly for us, AGCC as one of the top responding chambers in the country received its own set of figures, thanks to the 100 local businesses which take part in the monthly survey. With only minor variances over the 12 questions, the responses from this region mirror the national responses.

The significance of that is not inconsiderable because what it means is that the lobbying work which is carried out at national level to highlight key business issues to government ministers and other decision makers is a true and accurate representation of the issues which affect us in North-east Scotland.

The business survey is one which the current government at Westminster, its challengers and the Prospective Parliamentary Candidates of all political colours should take note of because it identifies some very clear indicators as to where business opinion and concerns currently lie.

Respondents were asked to select from a list, what they though the Number 1 priority for an incoming government should be – there was a clear winner in this one with 40.9% of North-east businesses saying that the Government must reduce its deficit (41.1% response UK wide). Behind that came Increase Tax Competitiveness (18.2%); Reduce Regulatory Burden (17.2%); Reduce Unemployment (9.1%); Maintain Public Expenditure (7.3%); Stimulate Exports (7.3%).

On the suggestion that the way to reduce that deficit was to increase taxes in some way or another, only 6.4% said that an increase in National Insurance Contributions (NIC) would be least damaging to business.

With these increases planned for April 2011, that sends out another very clear message that businesses believe that the increase will have a detrimental effect on their company – less that helpful when they are trying to pull themselves out of a recession which they don’t believe they have actually left, irrespective of what official data tells us.

The less than cheering news for employees of those businesses is that 41.5% say that wage growth restraint will be the main tool used to absorb this with 67% saying that pay and working hours will remain the same over the course of 2010.

The final message is aimed directly at the business policies of the three main political parties.

When asked - “Will the business policies of the Labour Party benefit your organisation?” – almost half of North-east businesses, some 47.3%, answered No.

But before politicians in the other two main UK parties start patting themselves on the back over that response, the same question , as you might expect , was asked regarding the business policies of the Conservative Party and the Liberal Democrat Party .

Top answer in both of those questions?

“I am not aware of them” – 35.5% (Conservative Party); 42.7% (Liberal Democrats).

• The full results of the survey can be accessed via the home page on our website – www.agcc.co.uk