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Cautious optimism for small businesses in Q3 according to survey PDF Print E-mail
Wednesday, 18 October 2017
Confidence levels among small businesses have bounced back to similar levels to those in Q1, following a dip as the General Election was held. However, despite the new wave of confidence, the proportion of businesses making investments to help their business grow has dropped. 

These findings come from new research commissioned by Hitachi Capital Business Finance asking over 1,000 small business owners across a range of sectors what steps they were considering to try and achieve growth.

In Q3 this year, over a third of SMEs (39%) anticipated either significant or modest growth in the next 6 months, up from 33% in Q2, and above levels to those of a year previously (33%).

However, comparing the responses to those in Q1 2017, there has been a dip in the proportion of businesses making these investments overall. Those planning to expand into new markets or overseas dropped from 20% in Q1 to 15% in Q3; those hiring new employees from 17% to 13%; and those investing in new equipment from 14% to 11%.

At a time when the details of the exit from the EU remain unknown, the results hint that the uncertain environment for businesses is having an effect on their actions.

This trend was exacerbated when looking at specific sectors. While number of businesses in the Transport and Distribution sector predicting growth remained at the 40% level (Q2 to Q3), the proportion expanding into new markets/overseas halved from 30% in Q1 to 15% in Q3 2017, while those investing in new equipment fell by 9% (from 23% to 14%) and those hiring new people fell from 18% to 14%.

Similarly, in the manufacturing sector where the proportion of growing businesses increased (from 39% to 44%), 22% of small businesses were planning to expand into new markets/overseas in Q3 – down from 32% in Q1, while those planning to hire new staff fell from 24% to 17%.

Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance commented: ‘With details of Britain’s exit from the EU still not known, small businesses continue to wait and see. The fact that confidence levels have increased in this period is testament to the fact that they can adapt to whatever circumstance, and will continue to do so whatever the politicians decide.’

‘Small businesses are continuing to make investments in this period, and it is vital for British business that they continue to do so. Hitachi Capital Business Finance can work with businesses to plan the investment over a period of time to maximise the potential for continuous and sustainable growth.’
 

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