The latest SME Confidence Tracker from Biddy Financial Services reveals that business confidence is down by ten percentage basis points compared with the start of the year.
Brexit Uncertainty: Damaging the Economy
The research, conducted a year after the Brexit referendum, found that 59% of SMEs felt uncertainty caused by Brexit is damaging to the Government’s plans for a more productive and prosperous economy.
Tying in second place for post-Brexit concerns were the cost of doing business post-Brexit and the challenge of accessing quality talent, both named by 46% of respondents as key concerns.
Only 40% of respondent said they expected sales to increase over the next three months. However, small companies are still investing – seemingly tackling cost pressures by establishing new supply chains. Top of Form
The most popular area of investment for SME owners was staff training (37%), followed by office equipment (33%) and finding new suppliers (32%).
Edward Winterton, UK Chief Executive Officer at Bibby Financial Services, said: “Financial markets don’t like uncertainty, but neither do small and medium sized businesses. We have seen a strong decline in business confidence over recent weeks and we are now starting to see investment decisions being delayed, which will have further impacts on the economy.”
What SMEs want from the Government
The survey also asked SME owners what they wanted from the new Government.
29% said they wanted the Government to prioritise lower business rates for small businesses. Unsurprisingly, 20% would ask the Government to negotiate a new trade deal with the EU. 15% wanted the Government to establish a trade deal with the EU under World Trade Organisation rules.
“Our research in Q1 showed that two-fifths of SMEs felt that Brexit would make no difference to their businesses,” said Edward Winterton. “However, our latest findings reveal a significant step-change in attitudes amongst UK SMEs. Many would now like to see the Government get on with the job of negotiating a deal that works for both the UK economy and local business communities alike.
“Business rates are also a key priority for SME owners. We would welcome any move to reform business rates, which threaten our independent high street shops. This has been an ongoing concern for SMEs for some time and needs to be addressed effectively if we are to maintain our standing as a great place to do business.”