The latest SME Confidence Tracker for the fourth quarter 2016 shows that UK SMEs consider rising costs as their biggest concern in 2017.
More than a fifth (22 per cent) of SMEs feel that rising costs, brought on by the depreciation in the pound and an increase in inflation, is their number one challenge in the year ahead, leading them to take a more cautious approach towards investment. The uncertain economic climate is also adding to this lack of confidence, with 22 per cent citing this as a reason to hold off on investing in their business.
Increasing competition (18 per cent) and late payments (11 per cent) were also highlighted as key challenges for SMEs.
A spokesperson for the report says: "In little over six months we have seen investment intentions from SMEs halve. Faced with a heady cocktail of the impact of Brexit and an increasing lack of confidence, businesses are taking a more cautious approach. In some instances, perhaps worryingly, it appears that they could be bedding down to see out this uncertain period as they steel themselves for a bumpy ride as we near the self-imposed deadline by the government to trigger Article 50.
"While exporters are seeing a boost in overseas sales, this benefit only goes so far, as many businesses do not look overseas for opportunities. The UK is still too reliant on a consumer driven economy that has all the signs of slowing down. This prop won’t last for long."
With the expectation of more subdued and cautious consumer spending as the UK looks to exit the European Union, businesses must ensure they have the right structures in place to respond quickly to the changing market conditions.
Our business experts at Beavis Morgan are able to guide you on your strategy and assist in making those all-important business decisions that will have the greatest impact on future success.
For more information about how we can help you and your business, contact Steve Govey or your usual Beavis Morgan Partner.