By Daniel Hunter

The majority of small and medium-sized enterprises (SMEs) are predicting increased productivity in 2015 and 2016, according to research by venture capital investor, Albion Ventures.

Nearly two-thirds (63%) of SMEs are forecasting an average rise in productivity of 9% over the next 12 to 24 months.One in five (19%) have forecast productivity growth of 20% or more.

Improved market conditions, cited by 42% of respondents, is the biggest factor driving SME productivity followed by enhanced technology (13%), better management (13%) and increased skill levels (11%).

On a regional basis, SMEs in the North West of England are most confident about increasing their productivity, with 90% predicting an improvement. Small businesses in Scotland and Wales are the most bearish about their productivity prospects, scoring 44% and 45% respectively.
The report reveals that three-quarters (74%) of manufacturing businesses are confident of delivering improved productivity, the highest of all business sectors. The least optimistic are hotels and catering firms, with only 41% forecasting better productivity at a below-average rate of 6%.

Patrick Reeve, Managing Partner at Albion Ventures said: “The economic recovery may have resulted in steep falls in unemployment, but so far there has been little movement in the productivity needle. This research strongly hints that this is about to change, particularly in key sectors such as manufacturing, driven mainly by favourable market conditions. It is encouraging to see a number of internal factors such as better management and technology also playing a role in encouraging better productivity.”

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