SME Confidence Tracker: Green shoots of optimism this spring?

Quarter 1, 2024
Derek Ryan
Derek Ryan
BFS UK Managing Director
“Despite increasing optimism among SMEs and some signs that the economy is improving, sustained growth is hanging in the balance. Amid a testing credit environment and the corporate insolvency rate hitting a 30 year high in 2023, SME supply chains remain under pressure. This is having a huge impact on the cashflow of businesses across the country.” Derek Ryan, UK Managing Director, Bibby Financial Services

Summary

The findings of our latest SME Confidence Tracker show an optimistic but challenged SME community. There is clear confidence from the UK’s 5.6m SMEs, with the majority predicting sales growth over the coming months. Conversely, record high interest rates since the financial crisis of 2007/07 and inflation continue to pose challenges for these businesses. Coupled with the pending general election and a tough credit environment, these challenges risk delaying much needed investment to kick-start the UK economy.

Delayed capital expenditure may be a result of an uncertain credit environment for small businesses, with over half (53%) saying that it’s more difficult to access finance today compared to six months ago, and 61 percent of SMEs stating that existing lenders have reduced their credit availability in recent months.

Key findings

  • 57% of SMEs are profitable today
  • 61% predict an increase in sales in the next six months
  • 46% say it’s more difficult to access external finance than it was six months ago
  • 48% of female founders think external finance is harder to secure for women-owned businesses
  • 53% are putting off major investments until interest rates drop
  • 43% are delaying investments until the next general election

What is the SME Confidence Tracker?

Launched in 2015, the SME Confidence Tracker is a regular study of SME owners and decision makers across the manufacturing, construction, wholesale, transport and services sectors. The study is based on a poll of 1,000 UK SMEs, and tracks views of business owners on a range of subjects including current performance, legislation, Government policy and investment plans.