Almost all SMEs (small to medium enterprises) in the UK have plans to invest in growth over the next year, according to new research from Clydesdale and Yorkshire Bank.
The survey, carried out as part of the bank’s Business Week, found that more than 4.5 million SMEs (97%) have plans to invest in growing their business in 2014.
The research found that, rather than cutting back or looking to maintain the status quo, businesses are focussing on keeping pace with demand; 60% of those surveyed cited this as being an influential factor in their decision to invest in growth.
Confidence is another major influence on businesses, with 57% of those surveyed citing optimism as an important factor in their decision making. Only 10% said that a lack of confidence was a barrier to investing in growth, and 4 out of 10 (43%) said that there were no barriers at all for them.
There are also signs that investment in growth from SMEs could benefit the wider UK economy. Research from Clydesdale and Yorkshire Bank indicates that SMEs plan to invest an average of 10% of turnover in growth. Based on official figures, this could be worth up to £160 billion (£34KI per business) to the UK economy.
Despite the optimism, the research recognised that certain barriers to investment do exist. A quarter of respondents felt that lack of funding could be an issue for them, with 18% saying that finding new customers would be their greatest challenge.
Paul Shepherd, director for business and personal banking at Clydesdale and Yorkshire Bank, said:
“These are encouraging results and echo recent official growth figures. They suggest many SMEs are at the point where they feel more certain about investing in their businesses. As the majority of UK companies are small and medium sized businesses, this has to be good for the economy as a whole.
“It’s important that we recognise and understand that there are still barriers to growth for some businesses. Access to funding has changed across the marketplace, but it is available to well-managed businesses with strong plans for growth.”