Small and medium-sized enterprises (SMEs) in the UK have raised their revenue growth projections for the third quarter in a row, a report by Capital Economics for Amazon and entrepreneur network Enterprise Nation has found.
SMEs are now forecasting a 2.3 per cent revenue growth for the coming 12 months.
The report revealed that small business confidence has strengthened to a score of three points in Q1 from minus four in Q4 last year. However broader sentiment remains negative, with scores for the UK economy at minus 11 compared to minus 15 in Q4 last year.
More than three in four SMEs (78 per cent) believe higher price inflation is a risk to their business in the year ahead and they are expecting to raise prices by two per cent in the next 12 months.
Manufacturing is the only sector to expect the wider UK economy to improve in the year ahead. However, SMEs in the financial services sector predict the largest revenue growth in the coming year (3.1 per cent), with hospitality and transport SMEs coming second (2.7 per cent), and health & education third (2.6 per cent).
“We are seeing a big rebound in confidence amongst British SMEs after a significant decline in December, but small businesses leaders remain concerned about the impact of rising supply costs and higher price inflation,” said Simon Johnson, UK director of seller services, Amazon.
Emma Jones, founder of Enterprise Nation, added: “The SME community powers Britain’s economy and continues to show resilience in the face of uncertain times, but the government must take heed of increasing concerns about the negative impact of rising supply costs on small business.
"This year in particular, they are facing increasing responsibility for a number of issues including auto enrolment for pensions. We want to make sure the government understands the important role they play in the British economy and listens with conviction to their opportunities and challenges.”