Hitachi: SMEs unphased by uncertainty of Brexit
Eight in 10 SMEs are predicting business as usual in the next three months, according to Hitachi Capital Business Finance.
The poll reveals that 40% of SMEs anticipate growth in the three months to April 2017 – and a further 46% say they will continue as it is without significant growth or contraction.
Following the Bank of England’s projection that the economy would take a cumulative hit by 2019 of 1.5 per cent of GDP due to Brexit – which equates to around £30bn in today’s money – the new Hitachi Capital data suggests that SME confidence has remained consistently bullish over the last 15 months. The only exception was a short-term fall in confidence in the weeks immediately after the EU Referendum vote.
The findings are from the quarterly Business Barometer by Hitachi Capital Business Finance, which tracks continuity or change in SME confidence across the UK, key regions and sectors. The poll asked 1,213 SME decision makers what their business outlook was for the three-month period to the end of April 2017.
Continuing into 2017 the findings showed that 40% of those surveyed predicting significant growth or further expansion to their business. This year there are more SMEs predicating growth than there are those anticipating some form of difficulty by more than three to one (40% versus 12%).
Businesses that have been trading for the least amount of time (up to five years) were significantly more likely to have greater confidence in business outlook (52%), whereas those trading for 20 or more years were least positive (33%).
On a regional basis London may be a world economic centre, but when it comes to small business, it is East Anglia that is the SME ‘confidence capital’ where 50% of small businesses predict growth in the next three months. SMEs in Wales were those most likely to express concern for their business, with 10% fearing contraction and 8% predicting a struggle to survive.
SMEs in Financial Services were the most likely to predict growth for the next three months (56%).
Elsewhere optimism in the Manufacturing sector has risen significantly over the last six months, buoyed by the prospect of cheaper exports. Those predicting steady, organic growth in the next three months are up from 30% to 49% on six months ago, while fewer small businesses in the sector are predicting contraction.
Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, said: “With almost half of SMEs in the United Kingdom (46%) predicting business as usual for the next three months and a further 40% predicting growth, our research suggests that small businesses in the UK are paving the way for business development.
“SMEs are less inclined to subscribe to the uncertainties felt by their larger business counterparts. Global businesses fear the implications of changing trade negotiations that are being carried out under an uncertain political climate while many SMEs are taking the view of opportunity over loss; excited to expand with the possibility of new trade deals and feeling more in control of their own destinies.”