Trade credit insurer forecasts positive business outlook for growth ahead of March Spring Statement
Atradius, one of the UK’s largest trade credit insurers, reports an improving outlook for businesses as they prepare for the upcoming Spring Statement. Exclusive Atradius data reveals that 65% of UK businesses are confident in their ability to overcome Budget-related challenges and continue growing. This optimism is supported by a decline in claims across two-thirds of sectors compared to February 2024, signalling a positive start to the new financial year.
Sectors experiencing the most significant drop in claims include Textiles (-70%), Chemicals (-33%), and Machinery (-26%), reflecting a recovery driven by technological advancements and rising demand. However, despite this improvement, wider economic pressures persist.
In Q1 2025, inflation increased to 3%, contributing to uncertainty ahead of the Spring Statement. SMEs, in particular, face mounting concerns over expected National Insurance hikes and cuts to business rates relief. As a result, only 12% of micro-businesses plan to hire new staff this year, in stark contrast to 56% of medium-sized businesses, according to Atradius.
A survey of over 1,400 UK businesses found that resilience is strongest in the Tech and IT sectors. As industries continue to evolve in response to AI and digitalisation, companies must remain adaptable, investing in technology and equipment to sustain growth.
Despite an overall decline in claims, concerns around late or failed payments remain, with 63% of businesses identifying it as a key risk. Certain sectors, including Finance (+133%), Electronics (+50%), and Agriculture (+33%), have experienced a sharp increase in claims from January to February 2025. Businesses in these sectors must navigate the coming months carefully as they face economic uncertainties and the ongoing cost-of-living crisis.
Geopolitical uncertainties, including the US presidential transition, the war in Ukraine, and economic stagnation in the Eurozone, continue to challenge UK businesses. The potential for new tariffs and rising costs of goods further complicates trade. Meanwhile, the Labour government’s announcement to increase defence spending to 2.5% of national income over the next two years has sparked concerns over the potential reallocation of international aid funding and its broader economic impact.
James Burgess, head of commercial and insolvency expert at Atradius UK, commented: “With financial uncertainty looming ahead of the Spring Statement, it is encouraging to see a strong level of resilience across key sectors. While some businesses remain apprehensive about upcoming changes, proactive planning is essential to mitigating risks and capitalising on opportunities.”
He added: “Businesses that consistently analyse performance, reassess goals in line with financial realities, and manage cash flow effectively will be better positioned to withstand economic shifts. Identifying vulnerabilities and protecting trade credit agreements with insurance are among the most effective strategies to safeguard against the uncertainties of an evolving financial landscape.”
As businesses enter the new financial year, Atradius emphasises the importance of risk management tools such as trade credit insurance. Companies should prioritise liquidity, diversify supply chains, and implement robust credit protection strategies to maintain stability and resilience in an increasingly unpredictable economy.