Optimism among small and medium-sized businesses in the UK has grown for the third year in a row, showing promising signs for the domestic economy. New data reveals that nearly seven in ten SMEs feel positive about their company’s future. This confidence has risen from 67 per cent in 2023 and 65 per cent in 2022, based on findings from American Express.
The survey, which included responses from 1,000 UK SMEs, indicates that around three-quarters of businesses feel their operations are in good condition—up by five per cent compared to 2022. Small businesses, particularly those with one to nine employees, have shown the highest levels of optimism, with confidence levels reaching 67 per cent this year, compared to 62 per cent last year. Michelle Ovens, Director of Small Business Saturday UK, remarked that it is encouraging to see this rise in confidence, with many small firms recovering and seizing new opportunities for growth after a challenging few years.
Over 50 per cent of SMEs said they plan to invest more in their businesses over the coming year, reflecting a desire to build on the positive outlook. This data coincides with recent reports suggesting that the UK could see a record number of new businesses created in 2024. Already, 468,000 new incorporations were registered at Companies House in the first half of the year, putting the total on track to surpass last year’s record of 879,000, which had increased by 10.6 per cent from 2022.
Another promising development is the recent uptick in lending to UK SMEs. Major banks reported a 27 per cent increase in lending to small businesses during the first quarter of 2024, marking the first significant rise in almost two years.
Looking to the future, American Express data points to continued optimism, with 57 per cent of SMEs anticipating better sales in the fourth quarter of 2024 than in the previous two years. Amanda Salt, Vice President for Small & Medium Enterprises at American Express UK Card Services, noted that the strong optimism among SMEs is impressive, particularly as businesses navigate ongoing challenges and focus on growth and customer satisfaction.
The increased confidence among UK small businesses reflects resilience and optimism, bolstered by investment intentions and improved lending conditions, suggesting a bright outlook for the sector as the year progresses.
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.
