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|Small business growth expectations fall to lowest levels since early 2014|
|Thursday, 22 October 2015|
UK small business owners and decision-makers are adopting a cautious approach to capital expenditure, hiring and business growth, according to Bibby Financial Services’ latest SME Confidence Tracker.
Findings of the report show that less than half (46%) of SMEs expect their business to grow, down from 64% in Q1 2014, when the survey began.
Meanwhile the proportion of businesses expecting a decline in their sales is now greater than at any point seen previously in the SME Confidence Tracker.
David Postings, Global Chief Executive of Bibby Financial Services, said: “UK SMEs are sensing dark clouds on the economic horizon, which is translating into dampened expectations for growth in the final months of 2015.”
Signifying that SMEs appear to be holding fire on investment decisions, the report shows that just under half (46%) of small business owners and decision-makers are not planning to invest in their business, while a similar proportion (57%) do not plan to hire new staff over the next three months.
One in five (21%) said the uncertain economic environment in the UK was their primary reason for holding off on future investment.
Small businesses that are planning to invest appear to be focused on the general upkeep and maintenance of their business. Their primary reasons for investment are keeping ahead of the competition and replacing machinery and equipment that had deteriorated, indicating a ‘business as usual’ approach to capex, rather than funding growth.
Mr Postings continued: “It seems that even our smallest businesses are taking fright in response to gloomy indications from both the Bank of England and the IMF.
“With the distinct possibility of another recession in 2016, small businesses need support and stability. The urgent appointment of the Small Business Commissioner to tackle the issue of late payment would significantly help our small business owners to weather the storm.”
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