Businesses are becoming more optimistic over trading prospects but Shropshire firms are still struggling with late payments from customers, it was revealed today.

Although companies expect higher turnover in the next three months, nearly three-quarters say they will not be recruiting new staff.

The national picture from the latest survey from the British Chambers of Commerce is reflected in Shropshire, where companies say business confidence is improving but cashflow is still an issue.

The research from the BCC shows 29.7 per cent of companies expect sales to increase by up to a quarter over the next three months, which marks an improvement on the previous survey result of 22 per cent.

And fewer companies foresaw a fall in turnover, at 25.5 per cent compared with 31 per cent in the January study.

But more than 69 per cent of firms nationally say they do not plan to recruit job seekers or graduates over the next three months.

Shropshire chamber chiefs say the results from hundreds of companies across the UK, which included significant input from the county, show that half of businesses feel payment times are taking longer, emphasising the continued pressure on cash flow.

Richard Sheehan, director of Shropshire Chamber said: “These results show just how tough cash flow conditions are, with half of businesses hamstrung by increasingly late payments.

“The knock-on effect is that under a third of employers are planning to recruit over the next three months.

“More needs to be done to improve company cash flow and prevent the steady rise in unemployment.

“It is clear from this poll that the help on offer in the Budget fell short of many businesses’ expectations. Announcing a moratorium on new employment law and scrapping the planned rise in national insurance would certainly send a signal that the government is serious about supporting jobs.”

The survey revealed that one in ten businesses was spending more than 20 hours every week complying with employment law.