SMEs upbeat over 2020 growth prospects

David Sapsted reports on SME predictions of strong growth in the regions and opportunities in key business sectors, with some surprising insights.

David Sapsted

25 February 2020

Optimism among SMEs for growth prospects extends to the regions of Britain as well as London and the South East, according to a new survey published on 25 February.The UK's small and medium-sized enterprises (SMEs) are upbeat about the prospects for growth in the coming year after a surprising acceleration in business in the last quarter of 2019.Growth is forecast to be particularly strong in the regions of Britain, rather than being solely concentrated in London and the South East, according to the inaugural SME Barometer, published on 25 February by Barclaycard in partnership with the polling company YouGov.

North East England, Yorkshire and The Humber most optimistic short and long term

 SMEs in the survey expected growth to average at 6.3% over the next 12 months with businesses in the North East and Yorkshire & The Humber emerging as the most optimistic in both the short and long term, forecasting quarterly revenue growth of 5.3% and an annual rise of 7.9%. In Scotland, businesses reported the highest performance year-on-year in 2019, with a revenue increase of 6.6%. Their expectations for this year were for even stronger annual growth of 7.7%, compared to 6.5% in London.Across the country, 19% of SMEs said they regarded the strength of the UK economy as both the largest opportunity and biggest challenge they would they face this year. The next highest area in the 'opportunities' category was felt to be the introduction of new technology, while other challenges were considered to be competition and the availability of skills.

"SMEs are the engine of the UK economy"

 Rob Cameron, chief executive of Barclaycard Payments, says, “Small and medium businesses are the engine of the UK economy and a vital indicator of economic wellbeing. “It is crucial that we understand both their performance and their overall confidence, so that we can target support at the areas where it will have the most impact, driving further economic growth. It’s very encouraging to see that SMEs expect to increase revenue in both the near and longer term.” Businesses in construction and real estate had the highest predicted quarterly growth at 6.3%, while professional services firms were the most confident about annual growth, expecting a 9.8% rise in 2020.

"Embracing opportunities"

Emma Jones, founder of small business network Enterprise Nation, comments, “Being an entrepreneur has its peaks and troughs. With the economy stabilising, resilient self-starters and business owners are being realistic about the next 12 months.“They are embracing opportunities like the potential for new partners and availability of support, and they are alive to the advantages that affordable technology can bring. “In an environment with changing business conditions, a widening skills gap and inevitable competition, in the true spirit of entrepreneurship, the UK’s small businesses are getting on with the job with enthusiasm and determination.”