The Autumn statement will provide chancellor George Osborne with an opportunity to allay fears within small and medium-sized businesses, after a survey from accountancy firm BDO revealed that business confidence is at its second-lowest level since 2012.
Global problems affecting UK SMEs
According to the latest Quoted Companies Alliance (QCA)/BDO PULSE survey which polls the UK’s small and mid-cap quoted businesses, the global economic landscape is causing SMEs to either close down or dramatically cut down levels of staff, which produces an unconfident view towards the future.
Businesses surveyed were asked to produce a score of between 0-100 on their feelings towards the UK economy.
A score of 50 would represent a neutral outlook towards the future; however the average score fell to its lowest level since 2012, dropping from 64.3 in May to 61.8. In January 2014 the score was at 69.3, its highest level since records began.
Optimism about companies’ own prospects has also fallen, from 73.6 in January 2014 to 68.1. This mirrors a drop in their expected turnover growth for the year ahead to 13.4 per cent – the lowest score in over two years.
This low level of confidence is expected to impact employment levels, with BDO predicting that over the next 12 months, just 68 per cent of firms intend to hire more staff, a nine per cent drop compared to the survey taken in May 2015.
”Global uncertainty is impacting the confidence of the UK’s small and mid-cap businesses,” said Scott Knight, partner at BDO. ”The strengthening pound against the Euro, combined with the Chinese economic slowdown is having an impact on growth at home. In next week’s Autumn Statement we would like to see the Chancellor put the UK mid-market at the heart of his plans to rebalance the UK economy.”
On the 25th November chacellor George Osborne will update the nation on the state of the UK economy, as well as combining the statement with the Spending Review. If you’re an SME owner and wondering what to expect, SME Insider reveals the four major things you need to look out for this Wednesday.