UK health and medical firms optimistic

Confidence among health and medical firms about their prospects for the next six months is the highest among all industry sectors in the UK, despite pressure on profits, according to new research from Santander Corporate Banking.

Research conducted online among 873 small and medium-sized businesses in various sectors between January 19 and February 4, 2010 revealed that 31 per cent of firms reported profits increases in the past six months compared with 28 per cent reporting a decline. Profits are down, however, from September 2009 when the research was first conducted. At that time 51 per cent of firms reported an increase in profits compared with 23 per cent reporting a decline.

Despite this drop in profits, 87 per cent of health and medical company owners are confident in the prospects for their own business for the first half of 2010. This is up on the 83 per cent who were optimistic in September 2009. More than a quarter (28 per cent) of firms say they are very confident, while 59 per cent are confident about the future, with 13 per cent not very confident.

The confidence exhibited by the health and medical sector is well above the national average of 74 per cent of firms optimistic about the next six months. The national average has stalled since September 2009 when 75 per cent of companies were confident about their prospects.

Confidence is higher among firms with turnovers of £25m-plus with 81 per cent of those firms claiming to be either 'very confident' or 'confident' about their prospects. They report average profit rises in the past six months of 14.1 per cent. The analysis shows, however, that the continuing squeeze on profits is holding back confidence.

The average profit fall in the past six months is 16 per cent compared with the average rise of 13.7 per cent.  In the health and medical sector, however,  31 per cent of firms reported declines in profits, while 28 per cent have seen rises. The average fall in profits is 15.2 per cent while the average rise is 17.6 per cent.

The survey noted the second most confident sector to be technology/IT/telecoms, followed by advertising/marketing, charity and then manufacturing. The least confident business sector is construction/building services, which has also been the sector worst affected by the downturn, with 70 per cent suffering a drop in profits in the second half of 2009.