The small business community’s youngest entrepreneurs (those aged under 35) are the driving force behind the sector’s optimism this spring. With just weeks until Brexit comes into force, more than half the UK’s young generation of small business leaders (53%) say they feel optimistic about growth in the months ahead - according to new research from Hitachi Capital Business Finance.
As part of its five-year tracking study of small business hopes and fears, Hitachi Capital Business Finance asked 1,177 small business owners to give their outlook on the months ahead, specifically whether they predicted growth or contraction.
Heads held high
Proving that the North really is a powerhouse, small businesses based in both the North East (48%) and the North West (44%) were thriving under the unpredictable UK economic climate, and were the most likely to be forecasting that their companies would grow in the next three months.
Interestingly, despite reports of a slump in the sector, those in manufacturing were the most likely to be predicting a boom in growth this quarter - with almost half of respondents (46%) optimistic about the months ahead. Also weathering the political and economic storms were enterprises operating in the transport & distribution sector (44%), as were those in IT & telecoms – which saw a quarter-on-quarter rise in business optimism for small enterprises in the sector (42%, Q1 2019 vs. 31%, Q4 2018).
Down on their luck
In Wales, small business growth predictions were bleaker. More than two in four Welsh small businesses (27%) said they would struggle over the course of the next three months – more than double the figure this time last year (13%). Contraction levels have also risen for those small businesses based in Scotland. This quarter, 24% of Scottish respondents said that their business would struggle, rising sharply from just 3% at the end of last year.
Hitachi Capital’s new research further illustrates the challenging period that the retail sector has been going through, rippling down to affect smaller companies. The findings show that small businesses within the sector are those most likely of the 13 surveyed to be battling with the prospect of closure. One in four respondents from the retail sector (25%) predicted their business would contract in the next three months.
Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, commented: “It is clear from our latest data that small businesses in some sectors are feeling vulnerable and, for many, Brexit uncertainty main be exacerbating their concerns. That said, there are many small businesses that are already going towards uncertainty, seeing it as an opportunity to growth and seize market share. The confidence of young business owners, running emerging and digitised businesses is significant.
“Uncertainty will be the new certainty for 2019 and at Hitachi Capital Business Finance we are serious about supporting small businesses through a crucial stage in the economic cycle. We have plans in place to expand our products and services this year ahead to make sure small businesses aren’t left out in the cold without the support they need to get through a tough period. Whether small businesses have started the year with a positive or cautious outlook, they key is to put plans in place to anticipate and manage volatility – and at a time when many are scared of what the future holds, we are serious about helping bright small businesses to go towards uncertainty and to make their luck.”