SMEs put focus on growth despite concerns

The latest small and medium-sized enterprise (SME) “barometer” report from business adviser Azets has revealed ambitious growth plans among firms.

This is despite a significant drop in optimism about the economy.

The survey revealed 51% of all SMEs across the UK and Nordic countries are optimistic about the economic outlook, down from 68% last summer.

UK SMEs were the least positive, with 40% expecting the economic climate to worsen.

Despite concerns over the economy, 62% of all SMEs expect their turnover to increase during the next year and 53% anticipate their profits will improve.

Soaring cost inflation is the biggest day-today challenge facing the SME community, alongside serious recruitment problems, the survey found.

Nearly two-thirds (64%) of SMEs are unable to recruit people with the right skills.

Covid, cost inflation and employee wellbeing were also highlighted as key challenges.

Azets said addressing these challenges could have reduced capacity for focus on environmental, social and governance (ESG) issues, with 71% of SMEs not currently focused on reducing carbon emissions and 85% not measuring their carbon footprint.

Peter Gallanagh, regional chief executive for Azets in Scotland, said: “The Covid crisis has been particularly tough on SMEs.

“It is, therefore, no surprise optimism around the economic outlook has reduced.

“Despite this new uncertainty, SMEs remain committed to pivoting their business models and embracing digitalisation as the biggest opportunities to fuel growth.”