SMEs Are Confident Regarding The UK's Economic Situation

Around seven in ten (67 per cent) small and medium-sized enterprises (SMEs) in the UK believe the UK economy will continue to grow over the next 12 months.

This is one of the findings of a survey from Barclays, which questioned more than 500 small businesses about their economic predictions at the beginning of the third quarter (Q3) of this year.

Figures from the Office for National Statistics show that the UK's gross domestic product (GDP) grew by 0.9 per cent during Q2 of 2014, which may have led to this optimism among small firms regarding the near future of the country's economy.

This indicates somewhat significant growth, surpassing pre-recession levels. In addition, it is slightly higher than was predicted, with experts forecasting an increase of 0.8 per cent. Therefore, this shows that the economy is recovering at a faster pace than anticipated, which means good news for the country's small businesses.

Barclays' survey also found that just 22 per cent of SMEs believe Britain's financial situation will remain unchanged over the coming 12 months, while only four per cent think it will fall into decline.

Respondents that had been established for a longer amount of time were most confident about the economy, with 74 per cent of those set up before 1990 believing it would grow over the next year.

In addition, 80 per cent of those with between 50 and 249 employees anticipate economic growth, while among mid-sized SMEs (with ten to 49 members of staff), this optimism was held by 70 per cent of respondents.

Head of business lending and enterprise at Barclays Rebecca McNeil commented: "Small businesses are benefiting from a robust UK economic recovery, with turnover growth rebuilding momentum.

"We're seeing positive expectations from UK SMEs for future GDP growth, right into 2015 and as the heartbeat of the economy, it is vital that these businesses plan ahead and make the most of the opportunities available to grow in the coming months," she added.

Expert Opinion

This is the latest in a number of studies that indicates that the economy is continuing to improve, with optimism about the potential for future growth also on the rise among SMEs too. <br/> <br/>"The key issue for small businesses now is how they translate this positivity into actual results, with a central aspect being the need to have robust and comprehensive action plans in place to push on with their desired strategies. <br/> <br/>"When making plans for the future, a key issue for SMEs to bear in mind is ensuring that they speak to legal experts for guidance on how they can develop their operations and also ensure that all aspects of regulatory compliance are considered. Tailor legal advice on a range of issues from employment law to real estate can be key to ensuring that small firms are on the right track when it comes to growth." Fergal Dowling - Partner