SMEs display best performance since EU referendum

Eyes are peeled for any indication of the impact Brexit will have on UK plc – good or bad. Now, CYBG reveals SMEs are on the up after five lacklustre quarters of decline

SMEs display best performance since EU referendum

Given SMEs represent 99.9% of private sector business, even the slightest gust of wind in their economic sails can change everything. Throw in the Brexit hurricane nine months from now and this year’s SME reports make for the most interesting of the decade.

For instance, as part of its quarterly SME Health Check Index, Clydesdale Bank  (CYBG), the Scottish commercial bank, deduced that today’s SMEs are excelling in four out of eight areas compared to Q4 2017. Namely, Q1 2018 saw lending rocket by 31 points to a total of 56, followed by SME confidence spiking by 13 to make 46. Revenue levels also saw a surge of 12 points to 43 total and employment had just a five point increase but a large overall of 71.

It’s enough to push Q1’s overall index figure to 47.4 in a jump of 3.4 points from Q4 2017. Moreover, this puts an end to five consecutive quarters of SME decline since CYBG’s Q3 2016 report – marking the period of the EU referendum.

However, that doesn’t mean the Brexit effect has completely waned. In fact, the index also revealed net business creation had dropped by 17 points to a rock bottom 0, capacity down by nine to 36 total and GDP making an eight point decrease to 62.

Commenting on the findings Gavin Opperman, group customer banking director at CYBG, said: “The detailed picture is mixed. The Index remains well below levels seen in past years. While indicators such as lending, confidence and employment are on the up, net business creation is at the lowest rate since we began tracking it in 2014.

“Optimistically, I hope it sparks a serious debate about the access to talent our small firms need post-Brexit, plus how they can be incentivised to invest in skills and boost productivity.”

For now, it seems UK-EU negotiations have eased the minds of SMEs and brought them out of a two-year funk. But, with four more of these reports to go, never say never. 

Angus Shaw
Angus Shaw

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