Firms upbeat in poll

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The Independent Online

FLYING in the face of the economic gloom and doom merchants, two thirds of British companies are expecting an increase in sales over the next 12 months, according to a report published today on behalf of the telecommunications company, Energis.

Seventy per cent of business are also confident profits will rise in the coming year, with just 6 per cent expecting a drop in net revenue. The report follows Friday's official gross domestic product figures, which showed the economy is still growing in line with its long term trend.

According to the Energis report, exporters are the most optimistic of all with 68 per cent expecting revenue growth compared with 66 per cent for all other businesses. Almost three quarters (73 per cent) of exporters anticipate a rise in profits, compared with 69 per cent of other members of the UK business community.

Managers are more upbeat about the financial prospects than directors with 68 per cent of the former predicting a rise in turnover as against 60 per cent of directors. This should be good news for investors, as managers tend to have more hands-on experience of the day-to-day business climate than directors.

The survey, of 590 directors and managers in UK companies between 28 September and 2 October this year, included businesses with turnovers ranging from pounds 1m to pounds 500m. The most pessimistic group on the issues of sales were those with a turnover in the range between pounds 10m and pounds 50m. With regard to profitability, the most pessimistic were the smaller companies, although a substantial 63 per cent still anticipated a rise in profits.

Fears of a recession have been fuelled by the turmoil in the financial markets that has resulted from the economic crises in Asia and other emerging economies.

"Warning signs should not be ignored but there is a danger that a 'herd mentality' is developing on the issue of recess- ion" said Geoffrey Cheetham, Energis' marketing director.

According to Friday's government figures, GDP grew at 0.5 per cent of market prices in the third quarter.