SME Growth Tracker: Small business confidence in the East Midlands negative for 4th consecutive quarter
Q1 2018 SME Growth Tracker Confidence Index score for SMEs in the East Midlands is up 2 points to -2 but remains negative; their score for UK economy up 9 points to -9
SMEs that use e-commerce continue to project faster overall revenue growth in the coming 12 months, with East Midlands SMEs surveyed showing one of the highest rates of digital adoption (68 per cent) in the country
SMEs in the East Midlands are expecting to grow their revenues in the next 12 months, despite the latest SME Growth Tracker showing that confidence in business conditions in the region remains low.
The Q1 2018 SME Growth Tracker Confidence Index score for business conditions in the East Midlands has increased 2 points to -2 from December, mirroring the national trend. This compares to the UK-wide SME Confidence Index score which has continued to edge up since the general election last June and was at -6 in March nudging up from -7 in December. SMEs in the East Midlands expect the economy to fare worse with a score of -9, albeit this is higher than the score in December (-18).
The SME Growth Tracker is a report by Capital Economics commissioned by Amazon UK and Enterprise Nation that assesses confidence, growth prospects and views on the broader UK economy from small and medium-sized enterprises (SMEs).
Despite business confidence in the region remaining negative for the fourth consecutive quarter, local business owners still expect to increase revenues by 1.4 per cent and increase profits by 0.9 per cent in the next 12 months.
Small local businesses that use e-commerce continue to project faster overall revenue growth in the coming 12 months, with East Midlands SMEs surveyed showing the one of the highest rates of digital adoption in the country (68 per cent)
One local SME is Lupo, owned by Julius Oliveti. Lupo sells tech gadgets to customers nationally and internationally through Amazon Marketplace.
Commenting on the latest SME Growth Tracker findings, Julius said:
“The East Midlands is a fantastic place to do business, but confidence among SMEs in trading conditions is clearly an issue that we need to work together to resolve."
Despite the low confidence in our business community, SMEs like mine still plan to create more jobs, deliver increased revenues and deliver more profit in the coming 12 months. For me, this is a testament to the resilience of SMEs in the East Midlands and it makes me proud to live and work here.
“From my perspective, the best way for businesses like mine to deliver growth in this tough market is by adopting more digital technology. A large part of our growth comes from selling our products online. We sell through Amazon Marketplace, which offers us the opportunity to sell our goods to customers in the East Midlands, across the country and around the world. This is supported by the presence of several Amazon fulfilment centres in the region, including sites in Daventry and Coalville. Having this access to Amazon’s innovative fulfilment centre network and logistics expertise is a big plus for the region.
“The opportunities offered by trading online, for me, are second to none and I’d encourage all SME owners to embrace digital technology as we all try to work together to restore business confidence in our region.”
Across the East Midlands, the SME Growth Tracker found:
• Revenue to increase: SMEs in the region expect revenue growth over the coming year of 1.4 per cent. Over the previous year, revenue rose, on average, by 0.6 per cent.
• Confidence low: SMEs in the East Midlands are expecting business conditions for their company to get worse over the next 12 months with a score of -2. (In December their score was -4 and in March last year +4)
• Confidence in UK economy low: East Midlands SMEs aren’t confident about the UK economy, expecting it to deteriorate in the coming year, with a score of -9. This is an improvement on their score of -18 in December.
• Jobs growth: SMEs across the East Midlands expect to keep headcount by broadly unchanged (they expect a 0.1 per cent increase) in the next 12 months, an improvement on 0.4 per cent fall reportedly seen during the previous year.
• Rural businesses key: According to Amazon’s recent study with Rural England and Scotland’s Rural College (SRUC), 43.1 per cent of businesses in the East Midlands are rural. These businesses contribute 35.1 per cent of the total Gross Value Added (GVA) income for the region annually.
• Royal Wedding boost: SMEs in the East Midlands are forecasting a 0.8 per cent rise in revenue during the Royal Wedding and its build up in comparison with the same period last year (between April – June 2017)