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431 – The knife-edge of economic recovery

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23 April 2010

Business Car Manager: Editor’s Blog

FOLLOWING my blog yesterday about small business jitters, there has been some new information from Aviva that tends to support the view that there’s something of a knife-edge being trodden along the path to recovery.

A survey from Aviva suggests 60% of SMEs said they expect conditions to “remain difficult” for the rest of 2010 and a further third (32%) believed there was a “real risk” of a double dip in the economy. By contrast, only 14% were optimistic that green shoots would appear during 2010 and only 9% had seen their prospects actually improve during the first three months of the year.

SMEs appear to be pinning their hopes on the impact of the general election to improve their fortunes, with 70% believing that the general election will have a “significant impact” on the business environment for SMEs in the future.

I was talking to the owner of a small chauffeur drive firm today. His company has six cars and runs a very efficient business. But, he said, the volcanic ash cloud from Iceland and subsequent closure of the airports had really hit his business with the lack of airport transfer jobs. And, seeing as the business is fully booked for the next week, there was no chance of really recovering the lost business. He feared that many business owners in his line would find the trading environment unsustainable – particularly as the impending election was also having an effect on business.

David Bruce, Aviva’s commercial product manager had this comment: “Officially, the recovery started towards the end of 2009, but for many businesses green shoots have yet to appear.

“Small business owners remain resolute and resourceful, but they continue to need support and advice. With the election just a few weeks away, many will no doubt be looking for further clarity on the key policy pledges that will have a tangible effect on their bottom line.”

I think for many businesses it will be another case of maintaining a real watchful eye on the cash flow. Choke this off and it’s lights out.

I don’t want to be be unduly pessimistic. By nature I’m not. But we have a long way to go before we’re all out of the dark pit of recession. Don’t let anyone kid you otherwise.

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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