Despite the turbulence in the wider economy, the UK’s growth SMEs are highly confident about their prospects over the next 12 months, with the vast majority of CEOs forecasting strong growth. According to the ECI Interim Growth Survey, 80% of the SME CEOs surveyed expect to see turnover growth of more than 6% over the next year, while 55% forecast double-digit turnover growth.
It is good news for the job market too as 77% of CEOs expect to add to their firm’s head count, and more than 42% forecast growth in employee numbers of more than 6%. Financing remains a concern however, with 73% of respondents saying it is difficult or very difficult to raise growth finance. 42% cited lack of supply as the main reason. An increase in access to government subsidised credit came out as the second most popular priority for the coalition in the upcoming budget.
Respondents were asked to comment on the upcoming budget and their responses varied when it came to what the coalition government could do to enhance growth prospects for the SME community. Messages that came out strongly included:
Lower corporate taxes are number one on the wish list with over half of the respondents naming it as a priority
A reduction in NI, NI breaks for hiring unemployed and a removal of the effective 52% top rate of income tax came out as the next priority
Other areas the government could assist in growth are to increase tax breaks on R&D and increase government infrastructure spending
Steve Tudge, Managing Director at ECI, says: “Whilst it is encouraging to see so many growth companies continuing to forecast growth in sales and employment it is worrying that the environment for financing these companies appears to have deteriorated over the last six months. Whilst ECI has not experienced this directly having invested a record amount over the last 12 months we urge those who can improve the access of credit to SMEs to heed these warnings from these CEOs who make such a difference to the UK economy.”
