The number of SME owners feeling confident about the outlook for the economy and their own businesses over the next 12 months has sharply dropped. This is according to the latest quarterly Smith & Williamson Enterprise Index, which suggests that small businesses have largely responded unfavourably to Brexit. Could there, however, still be a chink of light at the end of the tunnel?
Confidence in the economy falls; so does confidence over prospects
The S&W Enterprise Index, which comes in the wake of the EU referendum result, reveals a 30% decrease in the proportion of SME owners anticipating economic improvements over the next year. The decline, from 114.4 to 97.7, means that confidence is now lower than the index’s starting figure of 100 in 2013. In other words, SMEs are now even more uncertain about their future than they were during a year following four volatile quarters of unstable economic contraction and expansion.
There was an additional fall of 27% in the number of SME owners who remain optimistic about their own company’s prospects over the coming year. Further surveys show up to half of respondents are now openly pessimistic about the short-term future.
Guy Rigby, who heads Smith & Williamson’s entrepreneurial services activities, said that while confidence was ‘badly affected’ in the run-up to the referendum, the responses after the result show that the economic outlook ‘fell off a cliff’.
A silver lining? Nearly half of SMEs are looking for finance
There is still, however, room for optimism. A survey commissioned by Bibby Financial Services and the British Chambers of Commerce has found that 47% of SMEs had actively sought out new finance in the last year.
The majority of these were either seeking start-up funding or further finance for business expansion – both of which suggest that many do still believe there are growth opportunities. This could well be the case in the import-export sector, as a weakened pound makes British exports more attractive in the global market.
As the economy becomes more volatile, margins can tighten and cashflows can become less robust. If you’re an SME who’s concerned about the impact of Brexit, contact Dukes Bailiffs to discover possible ways to future-proof your business from its effects.