Yorkshire SMEs Must Invest To Prosper, Says Bank

HSBC Report Calls On Firms To Make Investment A Priority

09.07.2014

Steven Beahan, Partner | +44 (0)114 294 7868

SMEs in the Yorkshire region need to invest wisely and substantially now if they are to make the most of the opportunities presented by the economic recovery, a new study by HSBC has concluded.

The Ambitious Businesses report has revealed 65 per cent of SMEs in the county are actively planning to expand in 2014, while 62 per cent of business chiefs are confident in the economy - up from 40 per cent a year ago.

However, the report also found there is still enough fear and scepticism about to hold many back from investing, with 41 per cent of businesses claiming it is still too risky to do so at present.

Commenting on these findings, commercial director for the bank in West Yorkshire Mike Hemingway said:
“We’re experiencing an increase in our lending and the quality of lending proposals we’re receiving highlight that businesses are viewing the future with real optimism."

He added: "With the indicators all looking positive, now is the time to invest in growth and I’d encourage SMEs to find out what support is available to them."

The HSBC report also revealed that the national outlook for SMEs is similarly positive to that experienced by firms in Yorkshire. Companies estimate that the economic recovery has increased revenues by £30,000 per microbusiness, £80,000 for small firms and £440,000 for each medium-sized enterprise.

However, head of business banking for HSBC Amanda Murphy said it was understandable that some small firms remain cautious about the recovery.

While the UK economy has been growing in every quarter since the end of 2012 and is expected to be confirmed to have passed its 2008 pre-recession peak of activity when the second quarter data for gross domestic product is published this month, there remain a number of doubts about the future.

Among these are uncertainty about the sustainability of the recovery, the timing and potential impact of a tightening of monetary policy by the Bank of England and the ongoing weakness of the eurozone. 

Expert Opinion
This is the latest in a long line of studies in recent months to reflect the growing confidence emerging among small businesses and how many of them are looking at their current position, primarily in terms of how they can develop their offerings and take advantage of the opportunities which are arising.

"While this is of course good news for the SME community, it is vital that entrepreneurs and employers recognise and appreciate the growing pains which can emerge as they look to develop. These can come in a variety of forms, whether that is employment law issues raised by growing a workforce or the need to move to new premises in order to expand operations.

"Due to these issues, it is an absolute necessity for small businesses to have access to the right support and advice, including legal expertise to ensure that there are no major hiccups in their continued work to develop their organisations."
Steven Beahan, Partner