RECOVERY prospects for the new year were given a much needed shot in the arm today after a study of SMEs found that nearly half expect growth in 2013.
With SMEs and entrepreneurs seen by many as key to the country’s economic revival, research from The Co-operative Bank has revealed that 44 per cent believe their sales and orders will rise next year.
The findings also show that one in four (26 per cent) businesses anticipate growth in international orders.
And there was further good news for the UK economy with around quarter (23 per cent) of senior decision makers saying they expect to invest in their company through, for example, new equipment or premises’ improvements. More than one in five (22 per cent) said they plan to expand their workforce through new recruitment drives.
Keith Alderson, managing director of Corporate and Business Banking at The Co-operative Bank, said: “SMEs and entrepreneurs are widely acknowledged as vital to Britain’s economic recovery so these results are good news as we head in to 2013.
“As the curtain closes on another tough year it seems many SMEs are now looking forward with a cautious sense of optimism about the challenges for their businesses next year.
“We see this entrepreneurial spirit day-in, day-out in our dealings with customers and I’m not surprised that SMEs are adapting and exploring new markets to overcome the economic challenges.”
Asked about the challenges facing their business in 2013, almost one in four (24 per cent) surprisingly said they did not view the current economic climate as one of their main concerns.
While uncertainty in the economy was by far and away the biggest challenge with 76 per cent, cashflow was regarded as the next main issue for 37 per cent of SMEs, followed by red tape/regulation for 27 per cent. A further 26 per cent were most concerned about the impact of rising energy costs, while 16 per cent cited support from banks as their main worry next year.
The study also found that 19 per cent of business felt sales and orders would fall in 2013 although more than a third (35 per cent) said they had suffered a decline in 2012. Some 14 per cent also experienced a decline in international orders this year, but just one in ten (10 per cent) felt that this would be the case in 2013.
Across the regions, SMEs in the South (excluding London) were most confident with 49 per cent believing that sales and orders would increase in 2013 compared to 39 per cent of businesses surveyed in the North.
Of the industries surveyed the financial services and accountancy sector (58 per cent) and media/marketing/advertising (64 per cent) companies are most confident about growth in 2013. However, the construction industry was the least positive with just 24 per cent believing they would experience growth in the new year.
The study was carried out on the Bank’s behalf by YouGov.