Midlands SMEs most optimistic in the UK - survey

Midlands SMEs are the most optimistic in the UK, according to a new survey from by Azets, the regional accountancy and business advisor to SMEs.

The inaugural SME Barometer, which surveyed 760 Azets SME clients across the UK and the Nordics (401 in the UK, 69 in the Midlands), revealed that despite the economy, Covid-19 and competition ranking in the top three threats for UK SMEs, 74 per cent of Midlands-based SMEs feel positive about the UK 's economic outlook over the next 12 months and almost half (45 per cent) expect their profits to increase.

61 per cent of SMEs in the Midlands expect their turnover to increase over the next year as confidence grows amongst businesses in the region.

There are further positive signs for SME growth and jobs in the Midlands, with over a quarter (26 per cent) expecting to recruit more staff over the next year and 54 per cent intending to invest.

In comparison to other UK regions, 59 per cent of SMEs in North East, North West and Yorkshire and Humberside and 60 per cent of SMEs in Scotland feeling positive about the economic outlook in general. SMEs in London & South East are the second most optimistic at 71 per cent.

Brexit remains firmly on the agenda in the Midlands, with SMEs naming as the third biggest threat to business.

However, the future for UK SMEs looks bright with 87 per cent saying they expect to be trading in a year 's time. In the Midlands, 86 per cent of SMEs expect to be trading in a year 's time.

Just 6 per cent said they are unlikely to be trading and 7 per cent are unsure.

As the UK went into lockdown last year, the government stepped in to support businesses during the pandemic.

75 per cent of Midlands SMEs say they felt well supported.

Across the Midlands, 39 per cent of SMEs still have staff on furlough - with hospitality, leisure & transport, retail, and manufacturing & construction businesses most likely to have made use of the scheme in the UK.

Paul Clifford (pictured), Midlands regional CEO with Azets, said: “There is a high level of optimism across the Midlands SME community and the investment and recruitment intentions are encouraging, along with an expected increase in turnover and profits.

“After a year of deep crisis and upheaval; with the vaccination programme accelerating across Europe and lockdown restrictions beginning to ease, the prospect of an economic recovery feels within our grasp.

“The Midlands has an important part to play in strengthening the UK economy and encouraging confidence across the regions.

“At the same time, plenty of uncertainty remains. Covid-19 is still a significant threat to business, but our inaugural SME Barometer is the strongest sign yet of growing confidence amongst SMEs in the Midlands and across the UK as SMEs demonstrate a pragmatic awareness of the need to adapt to the 'new normal '.

“The biggest opportunity and biggest threat for SMEs is adapting their post-Covid business model using technology and flexible working.

“Those who get this transition right will be in a better position to survive and thrive. ”