More than two thirds of the UK’s SMEs are planning for a growth in sales over the next three years, according to a major new survey.
A further quarter are expected to employ more staff in the coming 12 months, the research revealed.
The Department for Business, Innovation and Skills survey said that around half of the SME community planned to develop and launch new products or services, 40 per cent to invest in new premises, machinery or other types of capital investment and 70 per cent were looking to increase the skills of their workforce over the next three years.
Small Business Minister Anna Soubry said: “This survey shines a light on the small businesses that drive our economy and employ millions of people across the country – and it’s good news that small firms continue to employ more people.
“A strong economy underpins the success of our small businesses which is why this government continues to take the difficult decisions needed to keep our economy and businesses strong.”
The Small Business Survey 2015 also highlighted the challenges facing SMEs with half (49%) pointing to regulations/red tape and competition, followed by taxation (43%), late payment (33%) and staff recruitment/skills (32%).
Adam Tavener, chairman of Pension-led funding, said: “Small businesses generate a huge proportion of the UK’s GDP and their ability to access finance to plan for the future and prosper is vital to our economy as a whole.
“There is plenty of good news in the survey’s results but the research also highlights that we shouldn’t become complacent. There is work to be done. Funding our small businesses to support this welcome growth should be at the top of anyone’s priority list.”
Mike Cherry, National Chairman for the Federation of Small Businesses, also sounded a note of caution.
He told the SME Insider website: “There are many positives to be taken from the findings, including high levels of innovation and turnover growth among small and medium-sized firms.
“Yet the survey highlights a number of all-too-familiar barriers that are acting as a drag on business growth. Key obstacles include regulation, taxation, late payment and finding staff with the right skills – issues that come up time and time again in our own surveys, and must be prioritised by Government if smaller firms are to achieve their full economic potential.
“While it is encouraging to see that a quarter of smaller employers expect to employ more people in 12 months’ time, this figure is six per cent lower than the equivalent figure in the 2014 survey. This fall in hiring intentions reflects declining confidence levels among many small businesses, amid an ongoing period of economic uncertainty both at home and abroad and a raft of policy challenges that came into effect in early 2016.”
Researchers collected data from more than 15,000 SMEs. Only one in 10 reported a reduction in staff numbers, down from one in five in 2010.
The report also found that 24% employed more people than the 12 months previously, while staff levels remained the same in 66% of firms.
The numbers expecting turnover to increase in the coming 12 months was similar to those believing it would remain the same (45%/43%) with 38% reporting a greater turnover than the year before.