Handling the credit crisis

He said: "It is undoubtedly difficult. We're not seeing the volume of customers we'd expect. Sales are slow and the workshop is quiet.

"However, we hit the 110 per cent target Ford gave us for car sales and we met our targets for vans, but second-hand car sales are slow.

"This business lost money last year when we took over but this year it'll make money.

"The bank is talking about increasing our overdraft rate to pass on their costs.

"In the 1990s the car market was slow but now there's a more dramatic slowdown - since June it has got worse.

"We have a dealership at Tower Park and retail car sales in Poole is down by 30 per cent on last year. It's tougher there than in Taunton and Salisbury.

"The fourth quarter will be harder. We're not making redundancies but when people are leaving we're not replacing them.

"We do want to recruit more sales staff though."

ACADEMIA BANKING specialist Dr Clare Chambers from Bournemouth University, a former compliance officer for JP Morgan, thinks we can talk ourselves into recession.

She said: "The use of the term credit crunch' is promoting the problem because consumer confidence is important.

"But if the US doesn't agree a rescue plan, things could get quite bad.

"It will get worse before it gets better. The next six months will be critical, then we will be in the doldrums for about 18 months and in around five years' time we will be getting back to being buoyant again.

"I don't think you can blame the bankers. Banks are profit-making organisations and they should be making a profit for their shareholders. Employees are really doing their job for the bank.

"With all the regulations they have to comply with I don't think they were taking undue risks. Perhaps they were a little laissez faire.

"Traders get big bonuses but they work 70 to 80 hour weeks, and the money brings benefits for the whole of society. The financial sector is an integral part of our economy now. We couldn't just get rid of it."

PROPERTY - LETTINGS RESIDENTIAL lettings are increasing as it becomes harder to secure a mortgage, according to Bournemouth property business Martin & Co.

Managing director Ian Wilson said: "The lettings sector does not suffer the extremes that the sales side does.

"Where sales are suffering, lettings are buoyant because people always need somewhere to live and renting is now more affordable than buying a property.

"There are difficulties associated with obtaining a mortgage and consequently it's now more attractive to rent than it has been in the past. This sector also benefits from the impact of immigration.

"In terms of letting numbers, business is booming - we've exceeded our franchise target.

"The business will continue to open new offices throughout the country until January next year and in 2008 the Martin & Co network has delivered a 52 per cent increase in revenue compared with 2007."

PROPERTY - COMMERCIAL THE tough financial climate has meant that businesses lack the confidence to pursue expansion or relocation plans, says Jonathan Sibbett, partner at Poole commercial property specialists, Sibbett Gregory.

He said: "It is highly unsettling. We've not seen this before. No one has an idea as to what will happen next and it has a destabilising effect. Businesses are losing confidence and shelving plans.

"But I have a morbid fascination with the credit crunch - I wonder what life will be like once it's over.

"Our turnover has been affected by events and our development work has been hit hard by the lack of finance. The criteria for lending is more stringent now and entrepreneurs are finding it tough.

"Sibbett Gregory is a diverse business and we are being prudent with our planning for the future.

"I think everyone in business needs to think about costs and how we earn our income.

"We use our expertise as best as we can and have full staff meetings regularly. We might not be able to control the economy but we can control our attitudes.

"The firm has to shape itself as if things might get worse next year."

David Huck, commercial director at Goadbsy, suggests that instead of purchasing the freehold of a premises, businesses are turning to short-term leases.

He said: "What's happening in the financial markets has an impact on the commercial property sector because of uncertainty.

"There are delays in transactions due to uncertainty. Deals year-on-year have been the same but it's quality rather than quantity.

"Finance is proving very problematic. The volume of freehold deals is down because businesses cannot get mortgages. Developers are having difficulty too.

"Landlords are having to offer short leases of between three and five years whereas in buoyant markets, leases run from nine to 12 years.

"The losers are the retail sector - we've already heard that fabric retailer Rosebys went into administration last week. Pubs are finding it tough too as is the catering sector because people are staying at home rather than eating out.

"Discount food retailers are doing well though as are hotels, especially the budget ones, as people trade down and holiday at home to save money.

"Engineering companies are starting to look for space because of export growth and the nursery sector is growing.

"But as long as a unit is in a good location there are still transactions for leasehold properties.

"This winter's rise in fuel costs will further hit discretionary spending.

"We'll be well into the new year until we see an improvement in the marketplace."

BUILDING CHRIS Kane, director of Greendale Construction in Poole, does not think that instability in the banking sector will affect his business.

He said: "The problems in America are a great concern. I've never known anything like this - the uncertainty of the entire situation. It's changing by the hour. The FTSE is diving like mad - it's definitely political - there's an election coming in the US and it's a political game of chess which the UK is linked with.

"They've got to sort it out. It's difficult for anyone to predict.

"We bank with Lloyds and our order books are good but we're concerned.

"We're all nervous and if this isn't sorted out we're in stalemate.

"The country is not officially in recession but I think we will be and it could take five years to get through it. It's not reached the bottom yet.

"We need banks to start lending to one another again.

"Hopefully this won't affect Greendale because we work with low risk clients like Nuffield Hospitals and schools."

RETAIL BEALES' chief executive Tony Brown believes that happy customers will spend money. He said: "From our point of view it's all about restoring consumer confidence. The critical thing for that is the interest rate.

"The best thing would be a reduction and more work on stamp duty. We also need measures as far as rising costs of utilities are concerned, just to give people that breathing space.

"My view is that we are at the bottom. This is as bad as it will get. There are significant guarantees around the banking sector, and it looks like there will eventually be a deal in the US.

"The weak have failed already. I don't see any other banks getting in to the same problems as Bradford and Bingley. Any action other banks need to take has been taken.

"Banks like HSBC are very strong - they're looking at what opportunities they can take.

"If you look at the share prices today (Tue Sept 30) there's a small rally going on. Because people far more intelligent than you and I are thinking This is it now'."

IT JUSTIN Moors, operational director at Poole IT specialist Tech4, says that firms are seeking every competitive advantage they can to survive the current climate.

He said: "It's very scary and we are getting clients asking for advice on how to save money through their IT networks. It is reminiscent of the recession of the 1980s.

"The business is diversifying through acquisition. We have taken over a web development company and are finding that companies are looking to maximise their exposure over the internet - web-based businesses are growing.

"People are even more aware of the internet now using it to buy products such as CDs. They realise that it's a way of saving money not only on products but on travel costs and parking.

"We're not seeing an impact on our business and are experiencing steady growth."

DEFENCE JULIAN Hellebrand, group communications director at Wimborne defence company Cobham plc, suggests that the problems of the banking sector might actually boost the defence sector.

He said: "We're mindful of the increasingly dynamic economic climate as we have operations on five continents, but there may be a window of opportunity' which has presented itself as an outcome of the turmoil.

"For the past two decades the financial services market has been able to attract the best talent around the world with promises of glittering careers and financial rewards.

"This has now changed and we will be promoting the capabilities of the aerospace and defence industry, telling young people that excellent opportunities exist for an exciting and rewarding career."

TRAVEL TOURISM has had a difficult year with rising fuel costs, tour operators and airlines going into administration but David Skillicorn, managing director of Bournemouth tour operator Palmair, is hoping for a quick recovery.

He said: "Household names have got themselves into terrible positions, and you wonder how many more are out there.

"The idea that banks could go bust used to be absurd. Unfortunately it almost seems to be a daily occurrence.

"And the concern is people will start stockpiling five pound notes under the bed - not spending. If that happened, the economy could not only stagnate but go over the edge and into free-fall.

"A recession is not such a bad thing. It gets rid of the crooks and gamblers, and afterwards strong businesses can come forward and expand.

"The recovery will start fairly quickly.

"We're probably alone in that we are expanding. This is actually the time to look for opportunities. We've just opened a flagship branch in Southampton.

"This has been a truly horrible year for the travel industry - we've had to cope with rocketing jet fuel prices, a pound that has been increasingly worthless against the Euro and, with XL, the biggest collapse the industry has had since 1974."

TOURISM MIKE Francis, chairman of Bournemouth Tourism management board, which keeps a check on all sectors of tourism in the town, said firms are finding it more difficult and are having to work harder but that more people are turning to Bournemouth.

He said: "The international education sector is not affected by the economic slowdown.

"It hasn't affected language schools and in Bournemouth we're up on last year by 11.4 per cent while last year saw an increase on the previous year.

"It's all down to the low pound making it cheaper for foreign students to come to study in England.

"Often in recession it's businesses that export which do better than importers. Language schools are exporting the English language.

"The leisure and attraction group chaired by the Print Room's Andy Price has reported that the sector is not affected by the credit crunch. "Generally trade is the same this year as last and less outside investment in Bournemouth means traders are experiencing less competition.

"Hotels have experienced a reasonable year although they are slightly down on last year due to the bad summer.

"The conference sector has performed as well as it did the year before - numbers have been good although spending from delegates is down. And transport is holding up - it's consistent with last year."