By Daniel Hunter
The latest findings from the Investec Entrepreneur Confidence Index, which tracks the confidence levels of leading UK mid-market entrepreneurs, reveals one in three (33%) expect the UK economic climate to deteriorate over the next 12 months, with only 27% expecting it to improve.
However, this is an improvement on the Index findings from December 2011, when the corresponding figures were 49% and 13% respectively.
Despite a number of mid-market entrepreneurs feeling negative about the country’s economy, when it comes to their own enterprises, the vast majority expect them to grow. For example, when asked about what they expect to happen to the revenue of their UK businesses over the next 12 months, only 4% expect it to decline. Some 87% expect it to grow, with just over one in four (27%) expecting growth of over 20%.
Similarly, when it comes to cashflow, 70% expect it to grow over the next 12 months, and only 7% anticipate it will fall. In relation to profits, only one in ten expect them fall, compared to 81% who anticipate growth.
The latest findings from the Index are based on the views of 48 of the country’s leading entrepreneurs. Their businesses have a combined annual turnover of £2.6 billion or an average of £54 million each.
“A significant percentage of the entrepreneurial class still expect worse to come for the UK economy, but we are encouraged by the fact that there is a slight improvement in confidence levels when compared to the end of last year," Ed Cottrell, Investec said.
“However, what is clear from our findings is that many successful entrepreneurs still believe that there are considerable business opportunities for them, and the majority are planning to grow their UK enterprises.”
In terms of how they intend to grow, one in three (34%) say it is ‘very likely’ that they will launch new companies or products within the next 12 months, and 41% say it is ‘quite likely’ that they will do this.
Growth will also be fuelled by an increase in exports. 56% of entrepreneurs interviewed expect to enjoy an increase in the exporting of their goods over the next year, compared to only 4% who anticipate that their activity here will fall. Similarly, 51% expect their strategic exposure to new international markets through customers, suppliers and production, will increase, with only 2% expecting a decline.
“We are encouraged by the growth plans of many mid-market entrepreneurs, and this should have a positive effect on the UK economy," Cottrell continued.
"For example, 63% of entrepreneurs interviewed expect to see their workforce grow in number over the next 12 months, and 40% anticipate that their wage and employee benefit bill will increase, compared to 11% who expect it to fall.”
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