THE number of UK small firms reporting an increase in sales has risen for the first time in over a year.

The latest NatWest Small Business Research Trust Quarterly Survey of Small Business in Britain revealed that, in spite of the difficult economic outlook, nearly half (42 per cent) of small businesses reported sales turnover higher in the last quarter of 1998 than in the same period of 1997.

The figure climbed to 53 per cent for firms turning over more than £1.5 million.

But only a quarter of firms with a turnover of less than £20,000 reported a sales increase during 1998. The research also found:

Manufacturing firms and retailers are more pessimistic now than at any time since 1984.

More retailers are expecting their sales to decline than increase.

Nearly a quarter (22.3 per cent) were expecting to cut investment during the first three months of 1999.

Cashflow and late payment are less of a problem than in previous years.

Interest rates are no longer a major concern to the majority of small businesses.

However, red tape is increasingly becoming a major issue, with the number of firms citing Government regulations and paperwork as their greatest problem almost doubling to 11.3 per cent.

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