Finance and Accountancy Briefing
Can the private sector take up the Public sector slack?
Is it time to press the panic button? Not at all, according to the Coalition Government. They are confident that the private sector, and specifically its SMEs (small and medium-sized enterprises), will be able to absorb these public sector job losses.
This does not reflect the still very delicate state of the economy, which, to the shock of the markets, contracted by 0.5% in Q4 of last year. Nor does it reflect what we ourselves are seeing on the ground. We deal with companies of every size and from every sector day in, day out, and for a large proportion of them things are looking very bleak indeed. The reality is that many thousands of businesses - in particular SMEs - are still struggling, hardly supported by the fact that consumer demand and confidence remains low.
When you consider that small and medium sized enterprises account for around 60% of the private sector workforce, the true extent of the problem we are facing becomes clear.
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