Optimism within UK SMEs has been steadily rising for the third consecutive year, as revealed by a recent poll conducted by American Express. The survey highlighted that 70% of small and medium-sized businesses expressed confidence in the future of their operations, an increase from 67% in 2023 and 65% in 2022.
The survey further indicated that nearly three-quarters of businesses believe their company is in good condition, with this representing a 5% improvement since 2022. Smaller businesses, particularly those employing between one and nine people, have shown a noticeable boost in confidence, with 67% of them feeling optimistic this year, compared to 62% last year.
Micro enterprises, which are businesses with 1-9 employees, experienced the most significant increase in confidence. This year, 67% of these enterprises reported a positive outlook, up from 62% in 2023. Sole traders also shared a more optimistic view, with 52% expressing confidence this year, a slight increase from 49% in 2023.
The findings were drawn from the annual Barometer survey, which interviewed decision-makers from 1,000 UK micro, small, and medium-sized businesses, as well as sole traders. The survey was conducted in collaboration with Small Business Saturday UK, and it revealed that a solid 71% of SME leaders consider their businesses to be in good shape, showing a clear rise of 5 percentage points from the previous year.
This surge in optimism is driving a growth-oriented approach, with over half of the respondents planning to increase their investments over the next 12 months to expand their businesses. Business leaders are also keen to enhance customer engagement, with 54% aiming to improve communication with their customers, 42% intending to offer additional services, and 33% focusing on introducing more special offers.
Another encouraging trend has emerged among SMEs, as they believe customers are placing less emphasis on price when making purchasing decisions. In 2023, 57% of businesses felt that customers were primarily driven by price, but this number has dropped to 51% in 2024, suggesting a shift in consumer priorities.
Looking ahead to the remainder of the year, nearly 60% of respondents are optimistic about stronger sales in the fourth quarter of 2024 compared to the same period in previous years.
Amanda Salt, Vice President of Small & Medium Enterprises for UK Card Services at American Express, shared her thoughts on the findings. She noted the encouraging rise in confidence among SME businesses, despite the challenging economic environment. Salt emphasised the resilience of business owners, highlighting their focus on growth and delivering value to customers. She reiterated that American Express remains committed to supporting these businesses, offering a tailored range of products designed to help them thrive.
The results from the poll reflect a positive shift in sentiment among UK SMEs. With growing confidence and a focus on business development, many leaders are preparing to invest in their operations, strengthen customer relationships, and anticipate better sales outcomes for the year ahead.
Duke Capital Limited (LON:DUKE), formerly Duke Royalty Limited, is a Guernsey-based provider of hybrid capital solutions for small and medium-sized enterprises (SME) business owners in the United Kingdom, Europe and North America, combining the features of both equity and debt.
