[ad_1]
About one-third of small to medium-sized enterprises feel less confident in their ability to grow this year after the government’s Autumn Statement, in a sign of the pessimism spreading among many of the UK’s more entrepreneurial companies.
The number of SMEs planning to expand has fallen from 38 per cent in summer last year to 17 per cent now, according to a survey by the Association of Chartered Certified Accountants and the Corporate Finance Network.
The accounting groups also found that only a fraction of companies intended to recruit new staff in 2023, ranging from about 10 per cent among businesses in London to just 1 per cent in the east of England.
Measures introduced by ministers to reduce the impact of inflation and mitigate an impending recession and rising energy costs have fallen short, according to the groups, which polled accountancy professionals on the financial outlook of about 12,350 SME clients.
The survey’s findings highlight concerns among many smaller businesses, some of which are under pressure to repay debts accrued during bruising pandemic-related lockdowns.
Company bosses flagged energy prices as one of their main concerns, with costs expected to remain high after state support with bills is cut back in April.
Higher energy costs have added to wider inflationary pressures. On Wednesday, official data showed that UK consumer price inflation was at 10.5 per cent in December, down slightly on a 41-year high of 11.1 per cent in October. Separate figures this week revealed that corporate insolvencies rose sharply at the end of 2022.
Restructuring experts say that SMEs, which often lack the financial resources to survive an economic downturn, accounted for most of these failures.
The survey will also worry policymakers because small companies tend to be more optimistic than average, given the effort needed to set up and grow personal businesses, and form the bedrock of economic growth.
Almost two-thirds of SME bosses said they were experiencing higher levels of stress and anxiety because of economic uncertainty — double the proportion six months ago. About 80 per cent said the government should prioritise small businesses for future support.
The ACCA and CFA said respondents hoped that the Spring Budget on March 15 would address the severe problems that smaller businesses are facing.
Glenn Collins, ACCA UK’s head of technical and strategic engagement, warned that “if the government wants to achieve its ambitions for economic growth, then it needs to take action and put in place a robust plan to address business pessimism”.
Other industry groups are also submitting proposals for the Budget, with many concerned by the lack of a plan in the Autumn Statement to stimulate business growth.
CFN founder Kirsty McGregor said it was “quite shocking how business sentiment has flipped from having some hope for growth last quarter to now lacking in optimism this month”.
“This is a direct result of the lack of focus on growth initiatives for small businesses in the Autumn Statement whilst they are still managing increased interest rates and rising energy costs, coupled with the latest announcement of a reduction in government support,” she added.
The Department for Business, Energy and Industrial Strategy said: “To help businesses invest, grow and create jobs we have boosted the Research & Development Expenditure Credit by £2.5bn and introduced the super-deduction, providing 130 per cent capital allowances on qualifying plant and machinery.
“We are also providing businesses and other non-domestic energy users with an unprecedented £18bn package of support this winter.”
[ad_2]
Source link