By Daniel Hunter
Small and medium-sized enterprises (SMEs) in the UK feel that the decisive outcome of the General Election on 7 May will have a positive impact on prospects for both the economy and their businesses alike.
This has led to turnover expectations hitting a record high for the tri-annual Pulse survey of companies and advisors conducted by the accountants and business advisors BDO and the Quoted Companies Alliance (QCA), which began in the second half of 2011.
The survey found 74% of companies feel the result of the election was positive or very positive with this sentiment jumping to 87% amongst advisors. For companies, the Government’s pro-business policies (38%) and generally greater certainty and stability (26%) are the main reasons cited for this optimism. Advisors share this view, with 45% and 29% mentioning these respectively.
Following a falling away of confidence in their own business prospects in January, when Net Optimism halved to 16%, there has been a noticeable rebound with this figure more than doubling over the past three months to 35%. This has also translated into an increase in expectations for turnover growth, up from an average 14% at the beginning of the year to 17.4%. Encouragingly this has had a knock on effect for employment expectations, with three quarters of companies expected to increase full time staff over the next 12 months.
Scott Knight, Partner at BDO LLP, said: “Now that the election is decided, companies and advisors alike are much more confident. Business and markets hate uncertainty and the avoidance of a hung Parliament or coalition provides businesses with a firmer foundation for delivering their strategies.”
Tim Ward, Chief Executive of the QCA, said: “Growth is back on the agenda of confident companies. Businesses are more optimistic about the UK economy, their own prospects and seeking opportunities in overseas markets; they are looking to increase staff numbers as a result. This will provide a solid foundation for the rest of the year at least.”