UK SMEs are eyeing long-term growth as over a quarter plan to invest more in their businesses this year than before the pandemic, according to a survey by Virgin Money.
The focus on growth has never been clearer as businesses have had to close their doors, furlough workers and cut their costs.
After a year of a lockdown, 35 per cent of SMEs plan to invest between £10,000 and £10m this year, an uptick of 32 per cent from 2020.
The survey also showed that business creation was at a record high in the last three months of 2020, as the annual growth rate in the number of registered companies surged to 8.3 per cent, its highest since the survey began in 2014.
“While there are undoubtedly significant challenges ahead, many businesses remain optimistic and intend to invest for the future as the economy recovers,” group business director at Virgin Money, Gavin Opperman, said.
More than half of SMEs currently have staff on furlough, but after the Coronavirus Job Retention Scheme ends, only one in five expect to be able to keep all furloughed employees.
38 per cent of SMEs anticipate that their workforce will have to shrink this year, meanwhile, 29 per cent have reported that the need to cut costs was the primary reason for job losses.
Despite the cuts, 18 per cent of businesses are looking to take on more employees as part of their growth plans this year.
Nearly half of SMEs are set to increase their headcount due to expansion plans, with 26 per cent adding that they will feel confident in expanding their workforce once the economy improves.
23 per cent of businesses have even said that they need to hire more staff to deal with their customer backlog and demand once restrictions are lifted.