Bristol businesses have been warned to prepare to live in a “static economy” by experts at Bristol-based accountants BDO.
In the accountants and business advisers’ half-yearly review, firms in the city were told the indicators looked bleak, with higher unemployment and business failures expected.
Simon Girling, a partner in BDO’s Bristol business restructuring team, said indicators were pointing to a contraction in the South West economy over the next three to six months.
“The visible impact of living in a static economy is likely to be an increase in unemployment and business failure,” he said.
“In the South West and Wales we have many SMEs with balance sheets overburdened with debt, trading in the leisure, retail and construction sector, which are likely to be the worst affected sectors.”
The BDO team warned that, having fared relatively well at the start of the downturn, recent surveys suggest the South West is now faring worse than other regions in terms of activity and consumer confidence.
“The downturn to date suggests that businesses can survive for an awfully long time in a deteriorating or static economy – but generating absolutely no surplus cash to invest and remain competitive in the longer term,” Mr Girling added.
“Unless positive action is taken, this can result in death by a thousand cuts.”
The BDO report comes ahead of Chancellor George Osborne’s Autumn Statement on Tuesday which will set out how the Government plans to tackle the economic slowdown and which measures it will take to boost recovery.
Full details of – and reaction to – the Chancellor’s comments will be available on Bristol Business News on Tuesday afternoon.
