New Study Shows British Firms Are Optimistic About Economic Outlook

Small and medium enterprises (SMEs) throughout Europe are growing in confidence and it seems that British firms are particularly happy at the moment.

GE Capital International's latest European SME Capex Barometer showed the number of companies that have a positive outlook grew to a net balance of 33 per cent in the first quarter of 2014 - up from just 15 per cent in the corresponding period in 2013.

The survey confirmed the UK is the driving force behind this upturn, with 54 per cent of organisations currently feeling good about the economy, which is a 21 per cent rise on last year. Germany was next in the list, with 45 per cent of SMEs expecting increased trade.

There has been a great deal of uncertainty across Europe in recent years - especially in the eurozone - as some countries have teetered on the edge of complete financial meltdown.

While this has had an impact on SMEs, this latest study suggests that only 29 per cent of the 2,250 business leaders that took part in the survey felt that economic volatility was still a barrier to investment. This figure stood at 43 per cent in the first quarter of 2013.

German companies lead the way in terms of spending intentions, with firms expecting to invest €136 billion (£112.6 billion) this year. France (€90 billion) and the UK (€71 billion) are the next two countries in the projected capital expenditure list.

The same three nations will also drive European job creation in 2014, with 890,000 new roles expected to open up in Germany, 661,000 in the UK and 299,000 in France.

Maurice Benisty, chief commercial officer of GE Capital International, commented: "The economic recovery in Europe is gaining traction and we are encouraged to see many markets feeling more positive about their future growth prospects. We are now looking to see this optimism translate into increasing business investment which will help fuel further growth."

Expert Opinion

It is good to see such an increase in positivity amongst small and medium-sized businesses, but it is vital that this is translated into actual growth and job creation. <br/> <br/>“Following a great deal of uncertainty within the Eurozone, it is of course very welcome that SMEs throughout Europe are feeling optimistic about their growth prospects. <br/> <br/>“I believe that the UK is in the driving seat here and with other countries feeling good and showing signs of investment, SMEs must take advantage and if they haven’t done so already, they should look closely at how they can develop their international trade links.” <br/> Steven Beahan - Partner