Levels of confidence among the UK’s SMEs are faltering, a new survey has shown. Indeed the new Close Brothers Business Barometer suggests SME confidence has actually fallen back since the beginning of the year, with businesses now buffeted by a broad range of headwinds.
Only 20% of SMEs surveyed say they are feeling confident about the prospects for the UK economy. 31% of those surveyed believe any recovery that does happen will be achieved slowly, while More than a quarter of SMEs said they feared the economy could decline again, up slightly from the 25% of SMEs that felt this way at the beginning of the year.
So what’s behind the lack of confidence? “The macro-economic outlook worries many business leaders, as the UK faces uncertainty ahead of the referendum on European Union membership later this month and the global economy continues to waver,” said Close Brothers. “But SMEs also face issues such as the higher costs of the national minimum wage, pension auto-enrolment and new tax regulation.”
Pessimism is growing
“SMEs are deeply concerned about their prospects for the next 12 months,” warned David Thomson, CEO of Close Brothers Invoice Finance. “We know that many entrepreneurs and business leaders have exciting and ambitious plans for their companies, but fear their plans are not achievable against a backdrop of economic uncertainty and rising costs; in many cases, SMEs now feel even more pessimistic than they did at the beginning of the year.”
Meanwhile another survey has revealed that, 2 weeks out, 37% of SMEs want Britain to leave the EU. Amy Cashman, UK Managing Director of Financial Services & Technology at TNS, commented on the findings: “While some SME owners are backing Brexit, the high proportion of those predicting that the UK will remain in the EU, shows that fear of the unknown is likely to be a deciding factor on 23rd June.
“The reasons given by SME owners for voting, on both sides of the debate, show that the Brexit debate is influenced by people’s passions and personal preferences. The notion of an independent Britain is tugging at the heartstrings of voters to leave the EU, despite uncertainty about what this really means for business.”