UK’s middle market managers concerned with Euro indecision

Gresham Trust mid-market survey: one third of UK companies would consider private equity as a source of capital.

Middle market companies want the government to get to grips with the strong pound and the unresolved question of UK entry to the European Monetary Union, according to a study conducted by private equity house Gresham Trust.

The survey involved board level interviews with directors of 200 middle market companies in the service and manufacturing sectors. Half of the companies surveyed plan to increase their internal investment and a third of those surveyed said they would consider private equity as a source of funding.

83 per cent of middle market managers are concerned with external factors over which they have little control such as the level of the pound and interest rates, bureaucratic red tape and the dearth of skilled staff. And they question whether their needs will feature on political agendas in the next election.

However, more than two-thirds of middle market companies have no official boardroom stance on whether or not the UK should join EMU. Those that do have a corporate view are sharply split three to two in favour of entry.

Only 30 per cent had an agreed boardroom view on EMU entry, of which 18 per cent were in favour and 12 per cent against.

Skill shortages, especially in management, IT, design, sales and production, plagued half those surveyed and 50 per cent companies facing a shortage of skilled staff said the situation had worsened since the last survey.

Two thirds of respondents were optimistic about prospects over the next 12 months compared to 75 per cent six months ago. There are signs of a downturn with half experiencing higher overheads compared to just over a third last time and a third reporting lower profits (compared to a fifth in the summer survey).