Mid-market unsure of UK economic position

Survey reveals firms are not as confident in economy

The mid-market is losing faith in the UK economic position, according to the latest KPMG report.

The market watcher canvassed 200 UK businesses with a turnover of between £5m and £500m, and discovered that the percentage of respondents who thought the UK economy was currently at its ideal position had dropped by 10 per cent to 37 per cent since March.

Mel Egglenton, head of middle market at KPMG, said: "If they are starting to see the first signs of a shift to a less favourable position in the economic cycle, then that could spell the end of this prolonged period of untroubled business confidence.

"[Respondents] know that tougher times may be just around the corner. If they've spent the past six months wisely, then they should be well placed to cope," he said.

However, the report highlighted that the middle market is still in a stronger position than it was 12 months ago, with 56 per cent of respondents still feeling confident about the sector as a whole.

Russell Lux, managing director of VAR LuxTech, told CRN that market opportunity and optimism vary between sectors, such as telephony.

"We're still quite confident and sales are increasing for us month on month, " he said. "There are so many products coming out onto the market for sales to come in off the back of for us, but in other markets where this not the case then businesses may not be so buoyant or have such an optimistic opinion."

Duncan Davies, financial director at VAR Technology Solutions Group, told CRN: "At the bottom of the middle market there are some businesses going bust. However, the IT sector typically slows down during the summer months and I believe things will start to pick up again towards November."

An earlier KPMG mid-market report revealed that the technology, media and telecoms sectors will be hotspot areas for merger and acquisition activity over the next six months (CRN, 19 June).