UK SMEs resilient in face of uncertainty
The UK’s small businesses have reported fewer barriers to growth in 2016 than a year ago according to new research, despite economic uncertainty and market turbulence.
The Hitachi Capital British Business Barometer has therefore suggested that the impacts of Brexit may not be as bad as first feared for smaller businesses.
It tracks business outlook among small firms and found that 72% reported barriers to growth since October, improving from 77% a year ago.
Despite the political and economic backdrop, the proportion of firms that flag general market uncertainty has remained unchanged.
The report states that the improved resilience being shown by businesses is a reason to be positive, although young smaller businesses (those trading for five years or less) are particularly likely to face barriers to growth.
It is important that these firms are aware of the alternative finance options that are available to them, especially if growth is impacted or if debts are building up.
Businesses in London were also more likely to report that they faced issues, with 76% of SMEs in the capital saying that Brexit had slowed growth.
Nearly a third reported macro market uncertainty, while 17% said red tape and regulation was also having a negative impact on their output.
Those in manufacturing and retail were most likely to say there were factors that were limiting growth, named by 83% and 85% of those in the sectors respectively.
Of the issues raised, small firms in manufacturing were particularly concerned over the state of macro markets, the value of the pound and the challenges that come with using, or needing to replace, old equipment.
In the retail sector meanwhile, there was worry over the impacts of volatile cash flows and high banks – both issues that are paramount when firms are operating on very tight margins.
Two in three construction firms also listed barriers to growth, with the costs of sourcing labour and late payments the two main issues.
By Phil Smith
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