SMEs are highly optimistic about their turnover prospects and are showing increased business confidence, two separate reports released this week have shown.
Confidence amongst small businesses hit a three-year high across all UK regions and most sectors, according to the Small Business Index from the Federation of Small Businesses (FSB).
The FSB’s index reached 15.9 points in the second quarter of 2013 – 9.6 points higher than the start of 2013 and the second highest reading since the index began in 2010.
Other key findings from the FSB show:
More firms expect to increase their turnover, grow, and hire more staff in the coming months
An increase in exports from small firms, with export growth expected to increase further in the coming months
Rising energy prices remain the biggest cause of increased business costs.
National chairman for the FSB, John Allan, said the survey was good news but that Chancellor George Osborne needed to do more.
“The Chancellor must use the Spending Review to build on this optimism. While there are positive signs, inflation and not being able to access finance will affect how quickly, and how much, small firms can grow and create jobs.”
Research by YouGov also found that nearly a third (31 per cent) of SMEs believe they will see an increase in profit in the 2013-14 financial year compared to last year, while 41 per cent think their turnover will remain the same.
Medium sized companies – those with 50 to 249 employees – are most optimistic about the year ahead, with nearly half expecting an increase in turnover.
SMEs in the financial, accounting and consulting sectors are most optimistic about an increase in turnover.