Business confidence has nearly doubled during the past quarter but only half of companies think the UK has 
now reached the bottom of the downturn, research showed. Around 42% of senior executives think their business prospects are now good, up from just 22% during the first quarter of the year, according to KPMG. At the same time, only one in four executives think their prospects are still poor, compared with 37% in the spring. But despite their optimism about their own prospects, business leaders are far gloomier about the wider economy, with 54% considering the UK economic outlook to be bad, although this is an improvement on the 81% who felt this way last time the research was carried out. Around 55% of executives now think the economy has reached the bottom of the cycle, with 49% expecting the recession to last for less than a year, but 42% think the economy is still on a downward curve. One in three executives also admitted that their company is experiencing financial difficulties, with 51% facing higher financing costs and 53% experiencing tighter borrowing conditions. Overall 41% of companies said their banking relationship had worsened during the quarter. Malcolm Edge, head of markets for KPMG in the UK, said: "While it's encouraging that there has been an increase in confidence, this is only an improvement co mpared to the spring which revealed the lowest levels of optimism since our survey began in 2004. "Opinion is divided over whether the economy has dipped to its lowest point or whether worse is yet to come. I think we are somewhere close to the bottom and that we may need to get used to this uncomfortable position. "The jury is still out as to the likely shape of the recession and an 'L' shaped one - with a long period of relative stability but nothing constituting a recovery - cannot be ruled out." He added that the issues affecting the economy during the past year, such as weak demand, spare capacity, margin pressures and funding issues would not magically disappear.
now reached the bottom of the downturn, research showed. Around 42% of senior executives think their business prospects are now good, up from just 22% during the first quarter of the year, according to KPMG. At the same time, only one in four executives think their prospects are still poor, compared with 37% in the spring. But despite their optimism about their own prospects, business leaders are far gloomier about the wider economy, with 54% considering the UK economic outlook to be bad, although this is an improvement on the 81% who felt this way last time the research was carried out. Around 55% of executives now think the economy has reached the bottom of the cycle, with 49% expecting the recession to last for less than a year, but 42% think the economy is still on a downward curve. One in three executives also admitted that their company is experiencing financial difficulties, with 51% facing higher financing costs and 53% experiencing tighter borrowing conditions. Overall 41% of companies said their banking relationship had worsened during the quarter. Malcolm Edge, head of markets for KPMG in the UK, said: "While it's encouraging that there has been an increase in confidence, this is only an improvement co mpared to the spring which revealed the lowest levels of optimism since our survey began in 2004. "Opinion is divided over whether the economy has dipped to its lowest point or whether worse is yet to come. I think we are somewhere close to the bottom and that we may need to get used to this uncomfortable position. "The jury is still out as to the likely shape of the recession and an 'L' shaped one - with a long period of relative stability but nothing constituting a recovery - cannot be ruled out." He added that the issues affecting the economy during the past year, such as weak demand, spare capacity, margin pressures and funding issues would not magically disappear.
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