Over half of UK based mid-market companies believe their sector is still in recession, according to a survey of business managers.
The research, which was conducted by accountancy firm Grant Thornton, polled 150 chief executive officers and chief financial officers of mid-market companies, and found that 56 per cent of these decision makers thought their business sectors were not yet experiencing recovery.
In the construction sector, 87 per cent of respondents thought their industry was still in recession, while 58 per cent of respondents from the industrials and chemicals industries said they saw contraction in these respective sectors. Over two-thirds (67 per cent) of those polled said that cost reduction had been a high priority in the past 12-18 months.
Matt Osborne, director of debt finance origination at HSBC, said: “Many UK firms that are domestically focused are still struggling due to the moribund economy.
“Compared to the recession of the early ‘90’s, UK firms were better prepared for this downturn. Corporates still recognise that there is some pain ahead as the economy emerges from recession. Many have been in survival mode in recent months but this will slowly change as growth becomes the main objective once again.”
Half of respondents agreed that the costs of their funding and banking requirements have gone up on account of the financial crisis. Future prospects were positive for 64 per cent of respondents, however, who said that their focus would be on growing market share in the coming 12-18 months, while less than two-thirds (59 per cent) believe cost reduction will be the priority that underpins their future strategy.
David Ascott, corporate finance partner at Grant Thornton, said: “Mid-market firms are shifting their focus from cost reduction to growing their market share.
“Although there has been a significant rise in the cost of debt supporting expansion plans it is encouraging to see the mid-market companies resuming their growth plans.”