Britain’s Youngest Businesses Drive Sector Confidence for 2018December 04, 2017
Research shows how new businesses are almost four times as likely to anticipate growth this quarter
Forget notions that experience and scale are key factors for businesses in tackling Brexit uncertainty. New research from Hitachi Capital Business Finance reveals that it is the country’s youngest small businesses that are now the driving force behind business confidence for the months ahead.
The latest quarterly findings from Hitachi’s Business Barometer reveal that small businesses that have been trading for less than five years are nearly four times more likely to predict significant growth in the next three months than those that have been trading for more than 10 years (15 per cent and 4 per centrespectively).
The data suggests that age not size of a SME has a direct bearing on business confidence. For the third consecutive quarter, the proportion of young businesses predicting growth (significant or modest) has risen, peaking at 54% this quarter. This is in contrast to the overall figure for the SME sector, where those predicting growth this quarter is much lower (38%) and has remained static for the last nine months.
The research also found that young enterprises were the least likely to be concerned about market uncertainty (25% Vs. 31% businesses trading for 10 years or more), the value of sterling (8% Vs. 10%), or the impact of red tape (9% Vs. 19%) - the three issues that were top concerns for the period among small businesses in general.
These findings come at a time when industry sector has become less of a determinant for SME growth, as a general convergence in growth forecasts is noted in the latest data. Sectors where growth predictions were lowest during the first half of the year are seeing confidence rise for the next three months, whereas sectors where growth predictions were most bullish during the summer months now see confidence levels fall. With the exception of agriculture and transport, which have seen quite steep falls in confidence, the confidence gap between sectors noted in the summer has closed - with the percentage predicting growth across sectors ranging between 35% and 46%.
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