By Daniel Hunter
UK business confidence is at a three-year high, according to research published by Sage. Through its annual Business Index, Sage surveyed over 11,000 small and medium sized businesses in 17 countries and found that businesses across the world are now more confident than they have been for three years.
All global scores recorded this year were at their highest since the Business Index began in February 2011, suggesting that business confidence is recovering following the worst of the global economic crisis.
UK businesses are increasingly confident about their own prospects, recording scores of 62.55 out of 100 (up from 58.46 in 2012), the highest score recorded in all Eurozone countries. Similarly, confidence in the UK economy has risen 8.51 points in the last twelve months to 53.95, while confidence in the global economy is returning, rising 7.39 points in the last year to 51.10.
However, in spite of greater optimism, businesses in the UK describe themselves as among the most risk-averse in the world. 39% of UK business leaders described themselves as risk averse compared to a global average of 32%, placing Britain second only to Austria (48%) when it comes to avoiding making risky business decisions. At the same time only 42% of those polled in the UK described themselves as risk-takers, less than those in the USA (47%), France (48%) and Spain (50%).
Most UK businesses feel that banks and governments are behind the curve and are failing to make the most of increased business confidence. More than half (54%) of UK businesses agree that banks aren’t doing enough to make funding available to businesses and nearly three-quarters (73%) feel that the Government needs to put more pressure on banks to lend.
Brendan Flattery, CEO UK & Ireland at Sage, said: “After years of financial hardship, business confidence is at a three-year high. Businesses around the world are more optimistic about their own prospects. However, if businesses are to take advantage of the upsurge of economic confidence, then they need support and access to a wide range of funding sources, as in the US.
"More should be done to encourage investment in small businesses the world over. I believe that the development and encouragement of more diversified funding sources, such as angel investment, venture capital, peer-to-peer and crowd-funding, should be a priority. Confidence is returning; a lack of support and access to finance now for small businesses could have detrimental effects on a national and international level.”
Despite the frustration with the perceived lack of support, only 9% (compared with 17% globally) strongly agree that small businesses need to look at alternative funding sources. Furthermore, of all markets, UK businesses are the least positive about peer-to-peer funding with just 30% having a positive impression.
The Index also found that the core business priority for UK businesses is winning new customers (28%), while half of UK businesses (51%) say that cutting business bureaucracy would be one of the most important things the Government should do to help business confidence. 45% of businesses are also calling for a cut in business taxes.
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