Economy

SME optimism high, though north-south split emerges

Peter Gallanagh

Peter Gallanagh: ‘firms are adjusting their business models’

Contrary to reports at the turn of the year of widespread failures among SMEs, almost nine in ten (87%) expect to be trading in a year”s time, according to new data.

Of those surveyed by SME accountancy firm Azets, 68% feel positive about the UK’s economic outlook with more than 56% expecting profits to increase.

More than half (56%) of SMEs expect to recruit more staff during the next year and 60% intend to invest in the business, while 73% of those SMEs with staff on furlough intend to return all on to the payroll.

However, in a sign of a north-south divide, fewer businesses in Scotland (60%) and in the North of England (59%) feel positive about the UK’s economic outlook compared to 71% in London and the South. 

As the UK went into lockdown last year, the government stepped in to support businesses with 71% of SMEs feeling well supported by the policy programme.

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Peter Gallanagh, CEO for Scotland and the North, said: “There is a robust level of optimism across the SME community and the investment and recruitment intentions are very encouraging. 

“The disparity in optimism between Scotland/the North and The South reflect the heavy weighting towards the service sector in the South, which is showing stronger and faster signs of recovery. 

“Hopefully, recovery in confidence in Scotland and the North will accelerate as the economy strengthens across the regions, entrepreneurs start to invest and employment increases.

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