Rays of hope

FIRMS are showing signs of “rekindled confidence” in their prospects for the rest of the year, although profits could still fall.

A study of 2,500 companies by Lloyds TSB Commercial showed increasing hopes of better sales and orders by the end of 2009, but many feared that profits would remain under pressure and could fall.

Investment and recruitment plans are being scaled back and almost a third of firms reported cash-flow problems, slightly higher than at the start of the year.

One in 10 businesses said they expected to increase investment in the coming months but a third warned of cuts.

Business confidence has improved according to Greater Manchester Chamber’s latest quarterly economic survey. The survey revealed that overseas orders had improved for manufacturing and there had been no further deterioration in the UK market.

Manufacturers had also seen significant improvement in cash flow and confidence.

Against this, all indicators for manufacturing were significantly worse compared with this time last year. For example, only 16 per cent of companies reported they were working at full capacity compared with 33 per cent this time last year.