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The majority of UK small businesses expect growth in revenue and jobs over the next year, and those investing in exports and e-commerce are more confident about business prospects compared to those who don’t.

Nearly half (48%) of British small and medium-sized enterprises (SMEs) that use e-commerce expect revenue growth of +1.8% over the coming year compared to +1.3% for those who don’t, according to new research by Capital Economics.

The 45% of SMEs in the UK who use e-commerce to serve customers, also expect job growth of +0.9% compared to +0.6% for those who do not.

The findings come from the SME Growth Tracker, a new report commissioned by Enterprise Nation and Amazon UK, based on a YouGov survey of more than 1,000 British SMEs.

The report, which examines SME sentiment on economic growth, exports and the digital economy, also revealed that SMEs who export are more optimistic, predicting revenue growth of +1.8% compared to +1.2% for the 54% that don’t.

Exporters also expect job creation of +1.1%, compared to +0.5% for those who don’t.

Mark Pragnell, chief project economist, Capital Economics, said: “Most small businesses are saying they expect to grow revenue in the coming twelve months, particularly those in manufacturing, financial services and professionals services.

“Small businesses from Yorkshire and the Humber, the East Midlands and the East of England, through to London and the South East are most positive, while only those in Wales are expecting revenues to decline in the year ahead.”

Mr Pragnell added: “Companies who export and use e-commerce say they are expecting faster revenue growth than those who don’t sell online or only sell domestically.”

Looking ahead to post-Brexit Britain, SMEs believe that Government should prioritise negotiating new trade deals with the EU over any other region or country.

The rest of Europe, North America, China, India and Asia are also among highest priority areas for future trade negotiations.

The majority (77%) of SMEs say Brexit has had no impact on business decisions, while 23% report they have put off business decisions due to Brexit - 12% delaying hiring and 7% delaying additional investment in marketing, and 7% putting off improving business tools.

The report also found that 43% of SMEs believe that the wider UK economy will deteriorate over the next 12 months, compared to 33% who think it will stay the same, and 24% who expect an improvement.

Doug Gurr, UK country manager, Amazon, said: “Small businesses play a big role in helping us to serve our millions of customers, and through Amazon Marketplace, Amazon Payments and Amazon Web Services, we empower hundreds of thousands of UK businesses.

“The results show the increased confidence of those small businesses who are using e-commerce to reach new customers in Britain and of those who are exporting abroad. These businesses are demonstrating real leadership and helping to ensure the UK’s continued prominence on the global economic stage. We believe technology has a big role to play in helping to foster small businesses across Britain.”

As part of the research, Capital Economics has created index scores, which are designed to give a snapshot of the economic sentiment of British SMEs.

Capital Economics found SMEs are marginally upbeat, with an overall SME Growth Tracker Confidence Index score of +5. However, despite SMEs feeling upbeat about their own business, this view changes depending on whether they use e-commerce, whether they export, the size of the business and where they are based in the country.

SMEs that use e-commerce have a Confidence Index Score of +7 compared to +3 for those that don’t use digital tools. SMEs that export have a Confidence Index Score of +6 compared to SMEs that only sell domestically who have a score of +4.

Businesses with five employees or fewer are less confident than all SMEs, having a Confidence Index score of +1. SMEs in London (-1), the South West (-2), Scotland (-3) and Wales (-3) foresee conditions deteriorating for their company over the next 12 months.

Emma Jones, founder of Enterprise Nation and HM Government’s Crown Representative for Small Business, added: “This report underscores how important small businesses are to the UK and the number of jobs they help support up and down the country.

“We are pleased to see the confidence in manufacturing and across the east and south of the UK, while it’s clear there is an opportunity to do more to support businesses particularly in Wales and the South West.”