The shrinking economy's impact on business

The ITV News Business Club launched in January 2012. Photo: ITV News

Regular readers here will know that throughout this critical year, ITV News is following more than a 100 companies right across the country to track where the economy is going.

At our last Business Club meeting on the eve of the Budget, some of our members had identified signs of recovery, if not a full blown return to economic health.

So today, with the economy officially shrinking, what do some of them think?

I've been in Wales talking to two of our members at very different ends of the spectrum.

The boss of Tata Steel was an apprentice at what is now the biggest private sector employer in Wales. That firm is working hard to expand, even though the steel market is difficult in Europe at the moment.

Jon Ferriman of Tata Steel. Credit: ITV News

Jon Ferriman, the director at the plant is clear what is making life harder for them. He said UK policies, particularly on energy put them at a "competitive disadvantage" to France or Germany, saying the way taxes on energy work mean Tata UK pays 25 to an incredible 50 percent more than Tata in France or Germany.

And although the government talks a lot about making it easier for UK firms to manufacture he is clearly not convinced. He said: "We are not making it attractive to invest in the UK...this is a difficult place to do manufacturing...I don't think manufacturing is seen as a critical industry in the UK." So much for the 'march of the makers'.

He told me he saw no evidence of a strategy to change that and make life easier for manufacturers who want to grow, and when I asked him what would make a difference? Ferriman suggested looking to the US for a "fiscal stimulus that seems to be working".

Ferriman talks as the UK plant director of an international company who has to compete, not just with his rivals but also different countries within the massive Tata mega-firm. The UK plant has had visits from plenty of politicians, including the Chancellor himself. And Ferriman has no desire to involve himself in a political debate.

But clearly he is far from convinced that the government has a grip.

At the other end, Jason Carmichael runs Carmichaels Building Services in Swansea. As the Operations Director he knows exactly what is going on in the company. And the story of Carmichael's tells the extraordinary tale of what has happened to many firms in the last few years, underlining why the 'recovery' was perhaps no recovery at all.

Jason Carmichael. Credit: ITV News

In the years up to 2008, the turnover of the business was between £500,000 and £1million a year. Since 2008, it has been around £250,000. Yes, you read that right. In the last four years in total, they have traded between less than half what they used to make each year. Jason is still up and running, still working hard, and doing jobs without profit because that is better than no work at all. He told us there have been signs of a pick up now and then, including in the last little while.

But in his words, "We are bumping along as a business...the economy is flatlining". He told us, it is "all about survival".

To be clear, there are many businesses who applaud the government's determination to deal with the deficit. There are happily many companies around the country who are doing well. Those on the left will argue again the double dip is down to cutting too fast (although crucially total government spending is still going up). Those on the right will argue it's because the government isn't doing enough to make it easier for companies to thrive, scrapping regulation for example.

But there are many others running businesses around the country like Jon and Jason, who are unsure of where the economy, the government and so in a way their business is going next. By and large for them this is not about being ideologically 'right', it's about creating a climate where their employees and their companies can thrive.