- 43% of UK SME’s say uncertain economic environment is holding back investment
- Over a quarter of UK SME’s are struggling to hire skilled workers
- Ambiguity could have a knock-on effect on Irish SME’s exporting to the UK
Almost a third of UK SME owners (30%) don’t know whether or not UK should stay in the Single Market, despite the UK Government’s pledge to leave the Single Market and the Customs Union, according to the latest SME Confidence Tracker from independent financial services provider, Bibby Financial Services (BFS).
The quarterly report also highlights that despite rising confidence overall, more than two-fifths of UK SME’s (43%) say they are holding back on investing in their businesses, due to the economic uncertainty surrounding Brexit. This is in stark contrast to Irish SME owners who reported in the Bibby Global Business Monitor, published in October 2017, that 97% were expecting to invest in their businesses this year.
A leading provider of financial support and funding solutions to SME’s, Bibby Financial Services helps businesses to thrive and grow in domestic and international markets by providing bespoke financial assistance and a wide range of specialist and working capital funding options.
The number of UK SME’s expecting sales to increase between April and June jumped by 13 per cent, with half (50%) expecting to see an increase, when compared with expectations for the first three months of the year. The overall confidence index rose by six basis points from 58 in Q4 2017 to 64 in Q1 2018. It is the highest reading since Q2 2015 when The European Union Referendum Bill was first unveiled.
With near record-low levels of unemployment, over a quarter (27%) of UK SME’s are struggling to hire skilled workers, and 23% say they have had to increase wages to retain existing skills. With many firms reliant on overseas workers, there are concerns that the issue will be compounded when the UK leaves the EU next year.
Over the next three months, more than two fifths (41%) of UK SME’s are planning to invest in training and developing existing staff, while a quarter (24%) are planning to bring in new talent. Just under a third (30%) are planning to upgrade their digital technology.
Mark O’Rourke, Managing Director of Bibby Financial Services Ireland, says:
“It is clear that even limited clarity over Brexit - and some compromise on behalf of both the UK and the EU following recent negotiations - has had somewhat of a calming effect on UK SME’s. This has resulted in an increase in confidence, which is long overdue following two years of tumbling confidence and subdued investment.
However, our research shows there’s still ongoing confusion amongst UK SME owners as to what’s involved in staying in the Single Market and the Customs Union. Real stability won’t be achieved until the UK government and the European Union finalise their plans.
No matter how big or small an Irish SME is, Brexit is going to affect their business. The Irish SME’s which will be successful in the long-term are those who are planning now for Brexit and thinking strategically about how they can protect profit margins, amid this insecurity.”
NOTES TO EDITORS
The SME Confidence Tracker is a quarterly poll of 1,000 SME owners in a nationally-representative survey. Fieldwork for the Q1 2018 survey ran between 26 February and 27 March. Research is conducted by Critical Research, one of the UK's leading independent market research companies.