Tuesday 25 February 2020 12:01 am

Small and medium-sized businesses confident about growth prospects this year

Small and medium-sized enterprises (SMEs) are optimistic about the year ahead, projecting average revenue growth of 6.3 per cent according to research published today.

The survey from Barclaycard and YouGov found SMEs in the UK predicted average revenue growth of 6.3 per cent over the next 12 months, with London businesses expecting growth of 6.5 per cent.

Barclaycard said its sales data showed that UK businesses performed well in the final quarter of last year, with the total volume of merchant transactions up 5.1 per cent year-on-year.

Read more: UK confidence in household finances hits record high

The total volume of merchant transactions is up 4.4 per cent in the first half of the first quarter, compared to the same period in the previous quarter, Barclaycard said.

The research found businesses were most confident about their supply chain and their cashflow, were broadly neutral on the state of the UK economy and were least confident about the UK’s legislative environment and its business environment stability.

Nearly half of London businesses (48 per cent) said their supply chain is strong and more than half said their cash flow is strong.

Three-in-10 London businesses are positive about the UK economy’s prospects, while 42 per cent are confident about their own business’ prospects.

Small businesses in construction and real estate have the highest predicted quarterly growth at 6.3 per cent, while professional services firms are most confident about the year ahead, expecting an annual boost of 9.8 per cent.

Read more: Business confidence rises across manufacturing and services sectors

Rob Cameron, chief executive of Barclaycard Payments, said: “Small and medium businesses are the engine of the UK economy and a vital indicator of economic wellbeing.

“It is crucial that we understand both their performance and their overall confidence, so that we can target support at the areas where it will have the most impact, driving further economic growth.

“It’s very encouraging to see that SMEs expect to increase revenue in both the near and longer-term.”

Emma Jones, founder of small business network Enterprise Nation, said “Being an entrepreneur has its peaks and troughs. With the economy stabilising, resilient self-starters and business owners are being realistic about the next 12 months.

“They are embracing opportunities like the potential for new partners and availability of support, and they are alive to the advantages that affordable technology can bring.

“In an environment with changing business conditions, a widening skills gap and inevitable competition, in the true spirit of entrepreneurship, the UK’s small businesses are getting on with the job with enthusiasm and determination.”