Just one in five SMEs are confident about economic future
A survey of small and medium-sized enterprises has reported that just one in five business leaders are confident in the UK economy and more than a quarter fear another decline.
The Close Brothers Business Barometer data suggests SME confidence has faltered since the beginning of the year, likely due to the climate of uncertainty surrounding future impacts on the economy.
In addition, close to a quarter actually warned they had not yet seen any true economic recovery, or even said they thought that the economy was worsening.
David Thomson, CEO of Close Brothers Invoice Finance, said: “SMEs are deeply concerned about their prospects for the next 12 months.
"We know that many entrepreneurs and business leaders have exciting and ambitious plans for their companies, but fear their plans are not achievable against a backdrop of economic uncertainty and rising costs."
A variety of financial issues are currently facing SMEs, including the higher national minimum wage, mandatory workplace pensions and new tax regulation.
Global economic turbulence and the ambiguous macro-economic outlook presented by the EU referendum are also factors.
Similar feelings were apparently evident after the 2008 financial crisis, researchers said.
David added: "We found it was the businesses that explored every possible funding option and ensured their enterprises were constructed on firm financial foundations that were able to ride out the uncertainty and continue working towards their growth ambitions.”
The results of a survey commissioned by Norton Folgate were also revealed this week, reporting a willingness among small business leaders to invest in working assets.
According to the findings, 39% SMEs plan to invest in new IT equipment over the next 12 months, spending an average of £5,290 each.
In an indication of the growing popularity of alternative finance, 10% of those questioned said they intend to acquire funding this way. More than half also expect demand for alternative finance to increase over the next two years.