Small & Medium sized enterprises (SMEs) have increased their growth expectations for the coming 12 months, despite losing some confidence in their business prospects and the broader UK economy according to a YouGov survey of more than 1,000 SMEs across the UK.
The fourth quarter SME Growth Tracker, a report by Capital Economics commissioned by Amazon UK and Enterprise Nation assesses growth prospects and views on the broader UK economy from small and medium-sized enterprises (SME) and found that SMEs forecast revenue growth of +1.8% and employment growth of +0.8% over the coming year, compared with a prediction of +1.5% for revenue growth and +0.7% in employment growth in the Q3 tracker.
SMEs around the country also predict their profits will rise by +1.1% over the coming year compared with 0.2% over the last 12 months. In particular, SMEs in the East of England, South East, and West Midlands, and those in the financial sector, professional services, and IT & Telecoms sector, are forecasting the highest revenue growth.
Emma Jones MBE, founder of Enterprise Nation and HM Government’s Crown Representative for Small Business, said: “Britain’s small businesses play a crucial role in driving our economy, and are the most driven, adaptable, and resilient you will ever meet. With the right support, like lower rates, easy access to finance, and digital opportunities which boost exports and productivity, you’ll continue to see them grow year-on-year.”
Limited Brexit impact, but SMEs think it could hurt growth over the next 12 months
Almost three quarters (74%) of SMEs have not delayed any business decisions as a result of Brexit, showing only a marginal change since SMEs were polled in the Q3 tracker (77%). Twenty-six per cent of SMEs said they had delayed business decisions as a result of Brexit, up slightly from 23% in the Q3 tracker.
Mark Pragnell, Chief Project Economist, Capital Economics, commented: “Although a majority of SMEs see the consequences of Brexit as a risk over the next twelve months, Brexit isn’t everything. A bigger number of SMEs see euro-zone instability, a fall in domestic demand, higher price inflation and a global recession as greater risks to their business.”
E-commerce users more confident and expecting stronger revenue growth
SMEs that use e-commerce have an SME Confidence Index score for their own business of -2 compared to non-e- commerce users who have a score of -7. They expect overall revenue to increase by +2.1%, compared to SMEs who do not use e-commerce who predict lower revenue growth of +1.2% in 2017.
One-in-four SMEs also believe e-commerce will boost their sales at Christmas, whilst one-in-five also believe it will allow their employees to spend more time with their families during the holidays.
“What we’re hearing is that SMEs see a lot of opportunity in the year ahead, but equally some hurdles as they navigate potential changes in the economic landscape,” said Doug Gurr, UK Country Manager, Amazon. “Investment in proven growth drivers like e-commerce and exports and a focus on boosting productivity, help best position SMEs for the future, and at Amazon, we’ll be working hard to support and champion their success.”