Small and medium-sized businesses (SMEs) have seen a decrease of confidence over the last six months, Aon’s Small Business Change Index shows.
The study found that SMEs confidence in future growth has fallen from 50% to 48% over the last 6 months. Smaller businesses predicting difficult times have risen from 9% to 11% while those predicting no change have remained at 39%.
Larger start-ups were found to be significantly more confident for future growth, with 65% feeling that way as compared to 38% of smaller businesses.
Findings by sector show that SMEs in IT are most confident on growth for the next 6 months, increasing from 42% to 45%. While confidence among retail businesses fell from 55% to 49%.
SMEs based in the South West, Wales and Scotland were least confident about future growth while businesses in London, North West and South East had the most confident outlook. The study also found that a business’ size had an effect on its confidence levels, with young and well established entities feeling better about the future than those in the middle age range.
Recent figures from the Office for National Statistics show UK GPD growth at 0.5% between July to September this year, resulting in weaker domestic demand coupled with a slowing global economic outlook.
Chris Lee-Smith, Managing Director, Aon Risk Solutions Affinity Commented:
“Almost 1 in 4 UK businesses identified political uncertainty as a very real risk to overcome in the next 12 months. 6 months on, it is a surprise to see that SME business leader confidence is at best static, with some significant swings of opinion prevalent in a number of key industry sectors.
“Businesses that embrace change and are looking to open new markets are most likely to be very confident, whereas confidence is notably more muted among those businesses that are placing most emphasis on maintaining their current position.”