Privately held businesses are facing 2010 with renewed confidence, according to a survey by accountancy firm Grant Thornton.
Privately held businesses are facing 2010 with renewed confidence, according to a survey by accountancy firm Grant Thornton.
Almost half of respondents (40 per cent) expect to see a recovery in the second half of 2010, while 20 per cent anticipate an upturn in the first half of the year. Only 5 per cent believe that recovery will not come until 2012 or later.
Private companies were also buoyant about their balance sheets, with 58 per cent of respondents expecting revenues to rise in 2010, an increase of 21 per cent on last year. Similarly, 55 per cent anticipate higher profits, and only 17 per cent think that profits will drop, down from 37 per cent last year.
According to the study, companies are also forecasting greater price stability, with 54 per cent believing prices of their products or services will remain the same, and 28 per cent expecting an increase in prices.
David Campbell, head of privately held businesses and regional managing partner of Grant Thornton, says: ‘The increase in optimism of private companies in the UK strongly indicates belief that the turbulence in the economy is, for the most part, easing. Privately held businesses seem to be experiencing the effects of a stabilisation in the financial markets.’
The research indicates that businesses are preparing for the upturn by focusing on their current workforce. More than half of the respondents (55 per cent) say that nurturing skills among employees is their biggest priority, followed by targeting new markets (54 per cent) and developing new products and services (46 per cent).
In addition, 34 per cent expect employment levels in their business to rise in 2010, and only 16 per cent think that staff numbers will fall.
Campbell says: ‘Privately held businesses are expecting the recovery to gather pace as the year progresses. It is therefore imperative that they continue to pay close attention to strategies that boost profits, revenues and market share, but also to cash flow.’
