SME confidence wanes as economic uncertainty takes hold
Small and medium-sized businesses in the UK are increasingly concerned about their prospects for growth in the coming 12 months, a new survey shows.
The latest Close Brothers Business Barometer shows that only a fifth of SMEs say they are confident of a steady improvement in the overall economy. Almost a third (31%) say the path back to prosperity will be slow, although the majority feel that the worst challenges to do with recovery form the economic crash are now behind us.
More than a quarter of SMEs fear that the economy could slide into decline again however, a figure that was up slightly from the last Business Barometer at the start of the year.
Almost a quarter also said they had not personally experienced any true economic recovery, or warned that it was actually worsening.
The Business Barometer released in January showed a more optimistic outlook. When describing their economic outlook, more than half (54%) of SMEs showed confidence towards the continued recovery of the economy.
According to Close Brothers, there are a number of contributory factors that could be increasing the feeling of pessimism among UK SMEs. The UK economy is seen as facing a number of challenges, including uncertainty caused by the impending EU referendum and knock-on effects from a wavering global economy.
SMEs also face more specific challenges such as the costs of implementing the National Living Wage, pension auto-enrolment and a new regime of tax reporting and regulations. When combined, all these factors could leave some businesses requiring turnaround management or even facing insolvency.
When it comes to growth, only a fifth of SMEs expect to see their companies grow over the next 12 months. More than half (57%) are expecting to see no growth at all while around one in ten expect to see their businesses contract or even close down. 52% said they had experienced no growth over the past 12 months.
By contrast, nearly a third (29%) said they were seeking funding for growth in the Business Barometer published at the start of the year.
By Phil Smith