The UK’s small-to-medium-sized enterprises (SMEs) are still reluctant to invest, despite a record high in overall corporate appetite for investments.
The latest Ambitious Businesses report by HSBC surveyed 750 SMEs and found that two thirds of decision makers feel confident about the state of the economy, but that 36% still believe it is too risky to make significant investments.
Business confidence has been boosted this year by rising revenues, with SMEs generating an additional £80,000 turnover on average.
The report stated that small firms who did not capitalise on this upturn could risk “missing the boat”, with 47% of business leaders admitting that a lack of investment would put their company at a competitive disadvantage.
Amanda Murphy, head of business banking for HSBC, said:
“There is still a sizeable minority of businesses that are cautious about the recovery and reluctant to make significant investments now. These firms risk falling behind their more ambitious peers.”
By contrast, larger firms are extremely keen to invest, with 65% of CFOs claiming they would be happy to take the risk, according to a survey by Deloitte.
Ian Stewart, chief economist at Deloitte, said:
“UK corporates have shifted from balance sheet repair to growth and business spending is emerging as a driver of the UK recovery.”
Image by James Cridland