Economic gloom prompted by major job
losses and falling profits at large companies could be misplaced,
according to the managing director of Peterborough-based marketing and
public relations consultancy Smye Holland Associates.
Michael Holland believes several recent
surveys reveal there are plenty of good economic indicators coming
from smaller firms and that companies which may be planning to cut
their marketing expenditure could be making the wrong decision.
Among the good news stories is a report
from Alliance & Leicester based on a survey of 500 small UK
businesses. It found that 35 per cent were planning to increase their
workforce over the next three months and 60 per cent were predicting
'no change'. Only 5 per cent were predicting a reduction in
Another survey, conducted by K3 Business
Technology Group among 1,600 small and medium sized UK enterprises,
found that over three-quarters (77 per cent) said their business was
growing and only 23 per cent said it was declining.
In addition, the CBI's quarterly UK
economic survey predicts that the hard-pressed manufacturing industry
will emerge from recession at the end of this year and that output
growth will revive in 2002. The study reflects a similar analysis
published in trade journal The Engineer at the end of last month.
“There is always a danger that business
talks itself into a recession on the basis of a series of negative
reports from high profile international corporations,” said Mr
Holland. “However, many more companies are continuing at a high
level of activity. For example, statistics from The London Internet
Exchange - a Smye Holland Associates client - show that Internet
traffic in the UK continues to rise, although more slowly than at the
start of this year.
“These reports contain several positive
messages. First, smaller firms seem better able to ride out economic
turbulence when the going gets a little rough. Secondly, things are
generally getting better - although that may take a while to feed
through into big company profit figures.
“And finally, it suggests that those
firms that have been holding back on marketing expenditure in fear of
a forthcoming recession should now consider relaxing the purse strings
and stealing a march on their more cautious competitors.”