Region’s SMEs optimistic for 2014 but caution could hamper growth
FORTY per cent of SMEs in Yorkshire and the North East are confident about growth opportunities for their businesses over the next 12 months yet the overwhelming majority are reluctant to invest for growth, a survey has revealed.
Research carried out by Baker Tilly shows that 44% of SMEs in the region said they expected to increase turnover by 5% or more in the next 12 months, however 79% said they were not prepared to take on more debt to expand.
The findings were revealed in the Baker Tilly Your Business Outlook 2014 which surveyed 750 SMEs across the UK about their expectations, opinions and priorities for the coming year.
Despite the feeling of optimism for growth, the survey revealed that many businesses in the region remain cautious about investing in resources.
Only 19% of those surveyed said they plan to take on new staff within the next 12 months, marginally higher than the national figure of 18%.
Seventeen per cent said they planned to increase their capital expenditure, 29% planned to increase their sales and marketing spend, and a mere 19% planned to up their R&D spend.
Even though 73% of SMEs in the region experienced some form of uplift in turnover last year, overall, the research revealed the majority of SMEs surveyed were extremely risk- adverse and cautious about their business growth plans for the next 12 months.
Neil Sevitt, partner at Baker Tilly and SME specialist who is based in Leeds, said: “Over the last few years SMEs in the region have faced extremely challenging market conditions, but there is now a real optimism emerging around the prospects for growth. That said, the caution being expressed by local firms is a cause for concern. There needs to be more emphasis on research and development and more time dedicated to exploring international opportunities if SMEs are going to benefit from the economic upturn.
“If SMEs do not take a long-term view and ignore opportunities for investment and expansion, economic recovery will remain hesitant and uneven. Businesses need to take more courageous and strategic decisions and make the best use of tax incentives and Government assistance available to them.”
