SME Growth Tracker: Accelerated Revenue Growth Forecast for Manufacturing and Financial Services Despite Declining SME Confidence Seen Across the Country
Small British manufacturers expected to accelerate revenue growth to +2.2% in coming year, with financial services SMEs expected to grow +1.9% Q2 2018 SME Growth Tracker Confidence Index scores remains in negative territory, with scores for business conditions down two points to -8, and for the UK economy down three points to -21
LONDON – 11 July 2018 – The Q2 2018 SME Growth Tracker, published today, reports that amongst small and medium-sized enterprises (SMEs) the Confidence Index score for their business has deteriorated from -6 earlier this year to -8. Confidence in business conditions has remained negative for all SMEs since the UK general election in 2017, when it was at its lowest point (-11), and has not been positive since March 2017. The quarterly report by Capital Economics, commissioned by Amazon UK and Enterprise Nation, assesses growth prospects and views on the broader UK economy from SMEs based on a YouGov survey of over 1,000 UK SMEs. British manufacturers and financial services leading SME economy Revenue expectations for the coming year in these two sectors are consistent with their views that business conditions will improve. Manufacturing SMEs expect revenues to rise by 2.2 per cent over the coming year, after a 1.4 per cent rise in revenues over the past twelve months. SMEs in UK financial services saw revenues rise by 1.7 per cent over the past year and expect to see an acceleration to 1.9 per cent growth in the coming year. These results are both higher than the national average, where SMEs surveyed indicated growth of 0.4 per cent for the coming year. What’s more, SMEs in the manufacturing and financial services sector are planning the greatest increase to investment in the year ahead. Manufacturing SMEs expect to increase headcount by 0.8 per cent next year and increase capital expenditure by 1.7 per cent, while financial services SMEs are planning for increased investment in these areas of 1.5 per cent and 0.6 per cent respectively. “Although some sectors are showing more caution, manufacturers are leading the pack,” said Doug Gurr, UK Country Manager, Amazon. “It’s clear that where there is confidence in business conditions, small business owners are making plans for job creation, investment and growth. So the more that can be done to boost SME business confidence, the greater the benefits for the whole economy.” SMEs’ trade with EU falls as Brexit nears “The result suggests EU export volumes and revenue from EU exports have declined in response to Brexit”, said Giles Derrington, Head of Policy, Brexit, International and Economics, techUK. “To ensure the success of all sectors, the Government must provide greater clarity on future trading arrangements, and act now to support entrepreneurs and SMEs in preparing for a post-Brexit world by them adopt and utilise the digital tools and services available to increase their productivity and boost their growth.” Brexit not the biggest concern for business Although the majority of SMEs surveyed this quarter said that they have not delayed any business decisions due to Brexit, three-in-ten (31 per cent) said they had. The number of SMEs delaying decisions due to Brexit increases to 41 per cent for those that export and to 44 per cent for SMEs that specifically export to the EU. The most commonly delayed business decision cited by SME business leaders concerned new hiring, followed by upgrading business tools and new capital raising endeavours. SME e-commerce revenue set to rise in the coming year -ENDS- Notes to Editors The SME Growth Tracker is commissioned by Enterprise Nation and Amazon UK. However the views expressed remain those of Capital Economics and are not necessarily shared by Enterprise Nation and Amazon UK. While every effort has been made to ensure that the data quoted and used for the research is reliable, there is no guarantee that it is correct, and Capital Economics Limited, Enterprise Nation, Amazon UK, their subsidiaries and affiliates can accept no liability whatsoever in respect of any errors or omissions. The SME Growth Tracker is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or investments. All figures, unless otherwise stated, are from YouGov Plc. or are calculated by Capital Economics using figures from You Gov Plc. Total sample size was 1,034 senior decision makers in SMEs. Fieldwork was undertaken between 18 May and 3 June 2018. The survey was carried out online. The figures have been weighted and are representative of all UK businesses in terms of size (i.e. number of employees). Numbers may not add up due to rounding. For more information, please contact: Capital Economics SME Growth Tracker: Confidence Index scores Capital Economics |
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