Economy News

UK SMEs ending year on a high

British small-to-medium-sized enterprises (SMEs) are feeling increasing confident going into 2014 thanks to the economic recovery over the last few months, according to representative body Federation of Small Businesses (FSB).

The confidence index, one part of the FSB’s Voice of Small Business report for the fourth quarter, jumped up to +21.6, from -5.6 for the previous year up until Q4 2012.

The report also suggested that small businesses were looking to hire more staff in the new year and grow their operations.

’Subdued’ lending market a concern for SMEs

Recently released Funding for Lending (FLS) figures have indicated that the credit market for small-to-medium-sized enterprises (SMEs) remains “subdued”.

Approximately half of all SMEs that have applied for loans over the last two years have either had their application denied or they are still waiting for feedback.

Despite the improving economic picture, many UK SMEs are still having cashflow crises, according to another survey.

Service sector buoyant ahead of growth forecasts

The UK service sector, which makes up approximately 80% of the UK economy, saw strong growth again last month according to the latest Purchasing Managers’ Index (PMI) scores.

The headline Markit/CIPS PMI came in at 60 for November, far ahead of the official figure of 50 which indicates growth. Although down on October’s 16 year record of 62.5, growth remains high and sustained.

Production returning home to UK

More and more manufacturing firms are bringing their production lines back home to the UK, a new survey has revealed.

15% of SMEs are either in the process of bringing production back to British shores or have already done so, in comparison to just 4% last year.

Reasons stated for bringing production back home include bringing down costs (26%), improving quality (20%) and reduce lead times (18%). But despite reducing costs associated with production at home, the high cost of domestic labour still remains a barrier for many.

One third unable to secure finance in 2013

Approximately one in three small-to-medium-sized enterprises (SMEs) across Europe has not managed to access the external business funding they desired in 2013, a new survey by the European Commission and European Central Bank has revealed.

A further 15% also suggested that an inability to secure finance was a significant problem to their companies.

It is believed by companies that access to finance has worsened during 2013, especially in relation to interest rates, collateral and guarantees required.