Medium-sized UK firms more optimistic than smaller firms, finds Azets

Medium-sized businesses in the UK are more optimistic about the future than smaller firms, according to new data from Azets. The firm has found a clear correlation between business size and financial confidence, with smaller firms in the UK in a slightly weaker financial position relative to their peers. Small businesses employing 10-49 people scored 6.1 out of 10 for confidence in their own financial future. However, medium-sized businesses which employ 50-249 people scored 6.8. Large companies expressed the highest levels of optimism about their own financial performance, scoring 7.3 out of 10. According to the survey, economic and geopolitical uncertainty rank as the challenges at the forefront of businesses’ minds, at 5.8 and 5.4 out of 10 respectively. This was followed by talent recruitment and retention and regulatory compliance (both 4.9). UK businesses show moderate confidence in talent attraction (5.6 out of 10) and retention (6.2). There is a notable difference in firm’s confidence levels between the two, with 58% of respondents expressing higher confidence in their ability to retain top talent, while only 48% indicate the same level of confidence in attracting new talent. Looking ahead, the UK’s business community expects turnover, profit and headcount to increase in the next 12 months, with scores ranging from 5.8 to 6.3 out of 10. Respondents to the survey also expect an increase in digitalisation, cybersecurity, and sustainability. Firms are more cautious about international trade at 5.4 out of 10 and expect a slight decrease in borrowing to fuel growth in the next 12 months, scoring 4.8. Peter Gallanagh, Azets UK CEO, said: “It’s clear from this latest Azets Barometer survey that UK businesses are mainly optimistic about the future and mildly confident about the UK’s economic prospects. It’s sensible that businesses remain cautious and take a pragmatic approach to investments in the next 12 months, with a General Election in July creating even more uncertainty, against a backdrop of long-term economic instability. “UK businesses are clearly prioritising investments in cyber security and people, placing a strong emphasis on fortifying their digital defences and maintaining a skilled workforce, while taking a more cautious approach towards exploring new products, industries, or markets.” He added: “Despite more positive signs of a return to growth in the UK, it’s clear that smaller firms continue to struggle as the cost of business remains high, leading to larger, more confident organisations cutting costs and families reducing discretionary spend. “It’s likely that the squeeze on smaller firms will continue for some time, which is demonstrated by businesses ranking geopolitical and economic uncertainty as the two biggest challenges over the next 12 months.”

Medium-sized UK firms more optimistic than smaller firms, finds Azets

Firms are more cautious about international trade at 5.4 out of 10 and expect a slight decrease in borrowing to fuel growth in the next 12 months, scoring 4.8

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