UK SMEs Buoyant but Less Optimistic About Future Growth and Recruitment

Having conducted its latest annual UK-wide survey of SMEs, AXA Business Insurance reports that that, while the overall levels of optimism remain healthy at more than 80%, nearly one in ten fewer SMEs expect growth than a year ago. Key findings include:

  • Overall levels of optimism remained steady at just over 80%.
  • The number of SMEs optimistic about growth this year dropped 9% compared to 2013.
  • SMEs planning to take on new employees in 2014 fell 40%.
  • Potential interest rate rises are a concern – nearly a third of respondents cited this as a reason for reduced optimism.
  • The UK’s most optimistic business is likely to be Scottish, run by a female under 35 and in the personal services sector.

Overall optimism stayed steady at 82% (81% in 2013), but was slightly lower among retail and distribution businesses (79%) and highest among businesses offering personal services (89 per cent). Retail businesses also showed a big drop in growth expectations – while 71% said they were optimistic of growth in 2013, this figure fell to 58% this year. Only construction/industrial companies were looking more confident about growth this year, possibly a reflection of the fastest growth in house building that the UK’s seen since 2003.

SMEs’ appetite for recruitment has also suffered this year, with a 40% drop in businesses planning to hire. Small retail businesses have taken the biggest hit – only 15% are planning to take on staff this year, compared to almost 50% this time last year.

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