The UK network and data communications industry is holding up well despite the credit crunch but the current market growth, a respectable 5%, is down from the previous year's 7%, finds research by Plimsoll.

While sales in the market continue to grow, albeit at a slower pace than last year, this buoyancy is distracting some directors from other areas of the business which require urgent attention, says David Pattison, Senior Analyst. He commented: "The reality is, sales teams are very rarely privy to the full picture. All too often, they are unaware of the costs of overheads, the levels of debt and how their sales add up in profitability. The latest figures do seem to suggest that the focus has switched from profit to sales, as companies grab business almost at any cost. The old adage has never been more apt, ‘sales for vanity - profit is sanity'."

Plimsoll's analysis also found that 33%% of network and data communications companies are currently selling at a loss; 44% are making less profit than last year; despite the alleged slow down in lending, 221% of companies are in more debt now than they were 12 months ago; and 165 companies are currently rated as a high risk of failure.