More companies look at job cuts

Oct 13 2008 by Karen Dent, The Journal

CONFIDENCE among North East businesses has hit a record low and increasing numbers of companies say they are considering cutting jobs.

Six out of 10 senior executives said they believed business prospects to be bad or very bad, double the number that confessed to such a gloomy outlook in May, according to accountant KPMG’s quarterly Business Confidence Survey.

An even higher number – 62% –said they were thinking about making staff redundant, compared to 53% in the previous quarterly survey. Three-quarters of the companies questioned said they were looking at ways to cut their overheads and almost seven in 10 had frozen recruitment. Almost half said they believed the economy was already in recession.

Mick Thompson, senior partner at KPMG in Newcastle, said: “Back in May, only one business in 10 thought that a full-blown recession was on the cards. Yet three months down the line, almost half of all businesses think that this recession is now upon us. Couple this with the fact that the vast majority believe the economic outlook will only get worse before it gets better, and it’s hard to see anything other than a gloomy winter ahead for the nation’s businesses.”

He said the sheer speed of developments on the financial markets had spooked business leaders and left many asking what they would be hit with next.

However, just 16% of firms said they had faced difficulties raising finance and more than a third said they were confident the prospects for their own business remained good.