SMEs still gloomy over economic recovery
The majority (60%) of Britain’s small and medium-sized businesses (SMEs) are not confident that the economy will improve over the next year.
According to the latest quarterly SME Risk Index from insurer, Zurich, anxiety at the current state of the economy is highest amongst SMEs in the construction industry (93%), closely followed by manufacturing businesses (88%) and retailers (85%).
More than half of SMEs questioned feel that the current business environment is more risky than this time last year, compared to only 11% who believe the level of risk has fallen.
Unfortunately, even the much hoped-for London 2012 “business bounce” didn’t materialise, with over three quarters of respondents saying that the Olympic Games had no impact on their business.
However, SMEs are fighting back with innovative measures, with over half saying that they have expanded business activity to target new customers.
Moreover, almost a third of respondents are seeking to diversify their business offering through methods such an expanded product range and services.
When asked to list three opportunities for their business, 23% of respondents said web-trading, 22% business innovation such as teleworking, and 19% access and expansion to overseas markets and customers.
Zurich’s director of SME, Richard Coleman, comments: “British SMEs are clearly facing a huge amount of risk in the current climate, with narrowing profit margins, tighter operating environments and uncertain revenue streams.
“However, their focus on web-based solutions and innovation to cut costs shows a positive sense of direction and ambition to move forward.”