Small firms in UK plan push for growth as confidence hits European high

The UK’s small firms have decided the time is right to invest and push for growth, with the highest levels of optimism in Europe, according to a new study.

The European SME Capex Barometer, a study of 2,250 small and medium-sized firms across seven European markets commissioned by leasing and finance provider GE Capital, found that small firms in the UK were planning to increase their capital expenditure by 12% in the next year to a total estimated £58.6bn – an average of £58.2k per business.

UK small firms also planned to invest heavily in staff over the next 12 months, with an estimated 660,000 new hires planned, a 26% rise on last year.

The survey, which took in businesses from the UK, France, Germany, Italy, Hungary, Poland and the Czech Republic, also found that overall confidence was stronger in the UK than in any other market surveyed.

Just under two-thirds of small firms (63%) in the UK said they were feeling confident about the future, compared to 9% expressing negativity – a significant rise on last year when just 52% of firms expressed confidence and 19% said they were worried about the future.

In addition, concern over the economy seems to be on the decline – 23% of firms surveyed said they saw economic certainty as an obstacle to investment, compared to 40% in 2013.

Ilaria del Beato, chief executive of GE Capital UK, said: “UK SMEs appear to have reached a crucial tipping point in their willingness to invest for growth and hire new staff.

“This is a true measure of economic recovery and points to promising future growth potential as greater investment should help boost productivity.”