Today’s economic report by the business insurer Hiscox wore a mask of optimism hiding a disappointing response from 500 UK SMEs with regards to the outlook for growth.
The UK ranked last in a survey exploring levels of business optimism, with just 40% expressing optimism for the year ahead. Companies in Germany were the most positive, with 55% saying that they were optimistic.
The survey was made up of 3,000 respondents who matched Hiscox’s definition of an SME as fewer than 50 employees. Of the other countries involved:
- 53% of SMEs from the Netherlands responded with optimism
- 47% in France
- 45% in the USA
- 41% in Spain
Bronek Masojada, chief executive at Hiscox, commented: “Despite the troubled times, optimism is the prevalent mood; only 26% were pessimistic and 27% were not sure.”
The key points made by Hiscox are as follows:
- More SMEs are optimistic than pessimistic in spite of the difficult economic climate.
- European uncertainty: 44% of SMEs in the EU countries surveyed had been influenced in their plans by the threat of instability in the eurozone.
- SME finances are tight: Only 12% found finance easy to find, 73% reported no change in their relationship with their banks.
However, the report also placed the UK at the bottom of the table for the proportion of SMEs that said finance was easy to find, only 10% stating that it was. There was only a marginal difference between the UK, USA, Germany and the Netherlands in this area, but companies in Spain found finance the easiest to obtain with 19.6% agreeing that it was.
The study highlighted the fact that cash flow within SMEs is under increasing pressure from late payments, 44% of the 500 UK companies citing that customers are paying later.
The UK labour market also fared poorly, less than half of the employers asked in the survey saying that school and university leavers’ levels of English and basic arithmetic were good or excellent.
Tom Moore
