By Claire West

Almost four in ten (38%) of mid-size businesses expect the UK to slip back into recession in 2011, according to the latest Mid-Size Business Confidence Survey by CIMA.

Despite the lack of confidence surrounding economic growth in 2011, 98% of mid-sized companies are still confident of their business survival — the highest level reported since the survey began in 2009.

Times are proving tough for many businesses in the UK with one third reporting they have already lost revenue as a direct result of public sector spending cuts. Furthermore, one in five expects the government cutbacks to have a knock on effect on their number of full-time employees in 2011. The operations functions will be hardest hit (84%) followed by finance (39%), IT (33%) marketing (30%) and human resources (28%).

It is good news for school leavers with almost a quarter of respondents expecting to take advantage of the government’s £1.4bn funding initiative to train apprentices. Of those due to take advantage of the initiative, each business is expecting to recruit on average three apprentices during 2011.

A quarter reported they are confident that the government can restore growth during the year but only 5% are confident that the government’s new lending initiative and targets — Project Merlin, an agreement between the government and the UK’s four biggest banks to lend more money to businesses - will genuinely improve lending to the mid-size sector.

Close to three quarters of mid-size businesses believe the Bank of England should keep interest rates unchanged in the next quarter of 2011.

Also a quarter of respondents consider sustainability a low priority on their agenda and a 1 in 9 do not think it is a priority at all.

Ray Perry, Executive Director, Brand, Profile and Marketing, CIMA, commented:

“The survey this time around has produced a varied bag of results. Although many of the respondents felt that the UK was likely to plunge back into recession, the majority still feel confident of their own business survival but at the same time expect to cut their number of full-time employees in order to achieve this.”